Health Care, An Incumbent's Issue

The core issue: The government is a not for profit organization. Virtually all private health insurance providers in America are for profit. Profits are passed on to consumers as part of the price of their policy premiums. Investors who have reaped enormous rewards from the health insurance industry profits are lined up to oppose Obama's not-for-profit health insurance plan. Some consumer groups (not including investor consumer groups), are lined up to support Obama's plan.

What profits are at stake? 14.2 million per year salaries for the top 7 private health insurer executives to begin with. Some claim health insurance profits have risen nearly a 1000 percent over the last decade. That's probably overstated, but, even 700% in 10 years speaks to gouging. Here is a list of health care profit increases since 2005. One fact is known, health insurance premiums have risen 5 times faster than wages in the last 5 years. And that has consumers railing. They are literally going broke due to constantly rising health insurance premiums.

The National Coalition on Health Care cites:

A recent study by Harvard University researchers found that the average out-of-pocket medical debt for those who filed for bankruptcy was $12,000. The study noted that 68 percent of those who filed for bankruptcy had health insurance. In addition, the study found that 50 percent of all bankruptcy filings were partly the result of medical expenses.9 Every 30 seconds in the United States someone files for bankruptcy in the aftermath of a serious health problem.

Even employer paid health insurance rates are hitting employees in the pocket book, since wage increases which would have been passed on to employee's have been spent instead on the dramatic increases in health insurance premiums paid by employers.

Everyone, conservatives and liberals alike, agree that something has to be done ASAP to halt the rising cost of health insurance. It is bankrupting the government, the States, and 10's of millions of Americans. The debate is over how.

The single most effective cut in health care insurance premiums would be to cut insurer's profits out of the loop. No other step could would result in greater cost savings in as short a time, as this one step. This is why the Obama administration is pushing for government sponsored health insurance with no profits being skimmed off the top of every health care transaction.

Doctors, nurses, hospitals and clinics would not see any change in their incomes, but everyone's health insurance premiums would stop rising as fast as they have been these last 5 years. Consumers groups hail the measure. Investor's are scared to death of it.

The reason investors fear government sponsored health insurance is not primarily the loss of profits by health insurance companies. In the short term, those would not change dramatically. What they fear is the model. Non-profit health insurance would be so successful in reducing the inflation of health care premiums, that they are certain such success would lead to a slippery slope wherein the next step would be non-profit health care deliverers.

In other words, not for profit hospitals, clinics, emergency rooms; in fact, a national slide toward an entirely not for profit health care industry, in which the boards of directors of non-profit hospitals and clinics are not paid at all, or at most, a 10th of what for profit boards are paid. And executives would see compensation packages pressured downward as competition between non-profit health care deliverers promoted the most health care delivery per dollar as part of their advertising and reputation.

Incumbents however, are going to make out like bandits on this issue. Republican incumbents are raking in money for their reelection campaigns from the for-profit corporate special interests of all kinds, not just health insurers, who fear this proposed non-profit model. Liberal Democrat incumbents of course, are benefiting from consumer advocate lobbyists promising potentially unprecedented get out the vote campaigns in favor of Democrats. Some conservative Democrats are benefiting from both sides of this issue, consumer advocate lobbyist's favor, and corporate lobbyists seeking to sway their vote on the reform bill.

Regardless of which side of this issue a voter stands on, the battle is being fought by lobbyists on Capital Hill, and Congressional incumbents seeking reelection are the monkey's in the middle. Usually, in circumstances like these, the American people wind up with something so compromised as to be of less benefit in the long run that doing nothing at all. When a problem goes unaddressed, the pressure builds to take dramatic action. Time will tell if the pressure on the health care cost issue has built up sufficiently to generate a real beneficial change for the nation and its health care industry future.

Conservatives are right in saying there is a slippery slope here as organizations like the Alliance for Advancing Non-Profit Health Care already exist and are lobbying Congress. Liberals are also right in saying that the shortest most effective route to lower health care costs is non-profit health care where shareholder and investor profits and fees are removed from the entire cost cycle of health care.

However, we here at VOID are also right in knowing that a majority of Congressional incumbents will be putting their reelection priorities far out ahead of consumers and patients when it comes to voting on a bill to reform America's unaffordable health care system. We rightly know that the only path to forcing Congress to put the nation and people first in their legislation is demonstrating to them with our growing number of votes that we won't re-elect anyone whose priority list puts themselves first.

By David R. Remer
Published: June 22, 2009 3:23 PM
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