Fixing The ‘Big F*%#ing Deal’

Health insurers won the pot. Reformers need a new game plan.

By Roger Bybee

In a too-loud whisper to President Barack Obama, Vice President Joe Biden famously characterized the signing of the Patient Protection and Affordable Care Act as “a big f*%#ing deal” at a triumphal White House news conference.

On a political level, the new law is indeed a “BFD.” But in terms of healthcare policy, many reformers believe that the law fundamentally reinforces insurers’ stranglehold on affordability and access. Consequently, the law will fail to restrain the market forces inexorably driving up healthcare costs, thereby forcing another confrontation further down the road as costs climb and coverage shrinks.

Still, America’s first comprehensive health plan represents a step toward establishing healthcare as a basic American right. The new law includes an extension of healthcare to 32 million uninsured people, some valuable protections against insurer abuses, and a badly needed expansion of Medicaid and community health clinics.

Although it passed by a slim 219-212 margin in the House, the law for expanded healthcare prevailed over shrill and intransigent “free-market” fundamentalists like Rep. Paul Ryan (R-Wisc.), who thundered against creating any “artificial” rights not directly mandated by God or the market.

The Patient Protection and Affordability Act was passed over the Republicans’ unanimous and unyielding opposition. As Sen. Jim DeMint’s (R-S.C.) vowed to hand the president a crippling “Waterloo”-scale defeat on healthcare, President Obama launched a last-minute push for passage, lashing out at insurers in more definitive terms than he had previously used.

Although Obama has hugely overstated the bill’s curbs on insurers, his recent vilification of the private insurance industry stood in sharp contrast to his earlier language that trivialized the industry’s misconduct as “monkey business.” Obama’s spotlighting of ruthless industry denials of care and of Anthem’s 39-percent premium hike in California could help ensure that the public continues to scrutinize insurers’ performance as the new law is implemented—at least that is what disappointed healthcare reformers hope.

Whither single-payer?

Health Care for America Now!, a coalition of 1,000 organizations, views the Patient Protection and Affordable Care Act in distinctly positive terms. “First of all, the most important thing is that it establishes that people will get decent health coverage that they can afford, and that government has a responsibility to provide that,” HCAN Executive Director Richard Kirsch told In These Times. “That’s a fundamental transformation, from it being a privilege to a right.”

“In the future, we’ll need more robust legislation with a role for a public entity,” says Kirsch, referring to the “public option” through which individuals could choose to get health coverage. “The debate will be how to do it better.”

Kirsch ticks off some vital areas for improvement. “We will need to improve the affordability for many families in the exchange [a government-sponsored offering of insurance plans for the presently uninsured to choose from], especially those just above the Medicaid level and adding some more help for the upper-middle class.”

HCAN’s leadership rejected a single-payer system from the start as lacking popular support—a position hotly disputed by, among others, the influential economist Robert Kuttner, who accused HCAN of manipulating public opinion survey data to justify jettisoning single- payer from consideration. Instead, HCAN promoted the notion of “keep the insurance you have if you like it” coupled with advocacy for a public option. Led by inside-the-beltway Washington progressives, HCAN in effect served as the “outside” grassroots muscle for the Obama administration’s inside game.

Insurance industry triumphs

Non-HCAN reformers are distressed by what they see as a fundamental defect with the new reforms: The new healthcare law enlarges and fortifies the throne from which for-profit insurers dominate the healthcare system.

Regardless of the policy differences among reformers, the law’s basic contours reflect the remarkable political power—exerted through campaign contributions, lobbying and television ads—of the for-profit insurance industry, according to Steffie Woolhandler of Harvard Medical School and Physicians for a National Health Plan, a 17,000-member organization advocating a single-payer or Medicare-for-all plan that would replace for-profit insurers with a single government entity.

“The big problem in this fight about trying to introduce the single-payer idea into the debate was actually the insurance industry and how they were allowed to write the bill and check the language of the bill throughout the process,” she told In These Times. Former WellPoint insurance company Vice President Liz Fowler, an “aide” to Senate Finance Chair Max Baucus (who ruled single-payer “off the table” early on in 2009), has been credited with writing much of the legislation.

Given the central role that the new law preserves for for-profit insurers, former Labor Secretary Robert Reich placed the new law in proper historical context when he cautioned in Salon.com: “Don’t believe anyone who says Obama’s healthcare legislation marks a swing of the pendulum back toward the Great Society and the New Deal. Obama’s health bill is a very conservative piece of legislation, building on a Republican [a private market approach much like Mitt Romney’s] rather than a New Deal foundation. The New Deal foundation would have offered Medicare to all Americans or, at the very least, featured a public insurance option.”

Consequently, the guiding logic of the current system—under which insurers maximize profits by minimizing care, and ever-expanding “provider chains” (hospitals, clinics and physician networks) seek to enlarge their revenues and market share without regard to health needs—will remain intact. “Most critically, the bill strengthens the economic and political power of a private insurance-based system based on profit rather than patient need,” says Rose Ann DeMoro, executive director of the National Nurses United union.

Some 23-million people will remain uninsured nine years after the laws passage, so the Patient Protection and Affordability Act falls woefully short of achieving the universality taken for granted in every other advanced nation. In fact, the new law creates an onerous individual mandate that creates an obligation for the uninsured to purchase flimsy and still-unaffordable private insurance, despite at least $447 billion in subsidies to the insurance industry.

Jane Hamsher of FireDogLake.com explained how the burden imposed by the individual mandate for the uninsured will keep healthcare unaffordable for middle-class families: “A family of four making $66,370 will be forced to pay $5,243 per year for insurance [premiums] … in addition to $5,882 in annual out-of-pocket medical expenses for which families will be responsible.” Families and individuals who fail to enroll will be subject to a fine rising to 2 percent of their income.

This creates an unprecedented financial obligation to private corporations that is nearly as large as families’ outlay for federal income taxes. Yet the new law aims at covering only 70 percent of the family’s total healthcare expenses (known as the “actuarial benefit”)—down from about 80 percent in typical employer-provided policies. So despite the shrunken coverage, “the CBO has projected that rising insurance costs could mean that middle-income families would spend 15 to 18 percent of their income on premiums and co-payments,” John Geyman of PNHP says.

Wendell Potter is a former CIGNA insurance communications director turned industry whistleblower who now works as a senior fellow with the Center on Media and Democracy. Last October he told WorkingInTheseTimes.com: “There’s a great danger of a public backlash when people find out that their healthcare is still unaffordable…I think that we will see a great upsurge against the health reform bill if it looks like the Senate Finance version”—which the new law does in terms of the financial burdens it imposes on individuals.

In 2014, the federal government will launch an “insurance exchange” that allows the uninsured, individuals and small groups a chance to compare and pick from various policies. Woolhandler predicts the popular response in these terms: “I think people will be asking, ‘Is this all there is? We’re going to be spending thousands of dollars on policies that will still leave us uncovered and vulnerable to going bankrupt?’ “

“Most regulations are full of loopholes, and the insurers will be spending a lot of time getting through the loopholes,” says Woolhandler. “For example, we’re all supposedly going to pay the same regardless of pre-existing conditions, but the law allows insurers to charge three times as much for someone over 55 as for a younger person.”

The new law also imposes new barriers to women’s reproductive rights, as women will have to make separate payments to obtain coverage for abortions.

A single-payer future?

If the failings of the Patient Protection and Affordability Act stoke popular outrage at the insurers, the channels for this progressive fury are difficult to envision. Just as worker protest over unemployment and plant closings in the current recession has been far less visible than in sharp downturns like the Reagan recession of the early 1980s, the healthcare reform battle was chiefly fought through an inside-the-beltway coalition (HCAN) rather than all-out mobilizations by vigorous social movements.

Unquestionably, pro-reform organizations mounted extensive efforts to stir up the grassroots. But their reach and impact appeared to be limited by their close attachment to the uninspiring legislation and White House pressure to go easy on conservative Democats. In a March 26 e-mail to members, MoveOn.org noted its 2,000 rallies and vigils attended by 150,000 people, along with generating pressure on legislators. HCAN staged some sizable protests, like its March rally of 2,000 outside a meeting of the insurers’ chief lobbying group, America’s Health Insurance Plans.

But the 13-million member Organizing for America (OFA), built during Obama’s remarkable 2008 campaign, was particularly hampered by both a weak bill and White House string-pulling. As Tim Dickinson writes in Rolling Stone, OFA functioned as “a flaccid, second-rate MoveOn.org, a weak counterweight to the mass protests and energetic street antics of the Tea Baggers.”

Starting in early August, pro-reform activity was buried by an avalanche of media coverage of “town hall” meetings and Tea Party protests. HCAN’s Kirsch may be correct in claiming “the first half of August was dominated by the Tea Party, but we dominated the second half.” Yet the right’s anti-reform activities generated far more visibility and incessant media focus. Major media outlets gave extensive and respectful treatment to the Tea Party types and their incoherent messages, outrageous claims (“death panels”) and offensive, hallucinatory imagery (Obama as the Joker, as Mao, as Hitler)—actions that would seemingly discredit any movement as nutty and extremist. As a result, the right managed to lay claim to the angry “populist,” anti-establishment franchise.

Developing a much stronger media operation to properly frame the healthcare players and issues will be just one of the challenges facing the reform movement. The upward trajectory of health costs and premiums may help to define the solution and to arouse a much broader swath of Americans in the next round of the healthcare reform fight.

The White House itself notes on its website, “If rapid health cost growth persists, the Congressional Budget Office estimates that by 2025, one out of every $4 in our national economy will be tied up in the health system.”

Some experts predict that the new law’s utter failure to rein in insurance premiums, trim the $400 billion dollar burden of insured-imposed administrative costs, and control the excess costs created by provider chains will ultimately make a Medicare-for-all or single-payer system unavoidable.

Writing in the New York Times , William F. Pewen, former senior health analyst for Sen. Olympia Snowe (R-Maine), put it this way: “When Congress next attempts reform, in a decade or more, health costs and the number of uninsured and underinsured will have escalated—and the likely outcome will be the single-payer system that Republicans most abhor.” 

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