Personal Health

Why Employer-Based Health Insurance Doesn't Cut It

The majority of doctors believe a single-payer system would provide the best care.

In December, President-elect Barack Obama invited Americans to hold more than 4,000 "health care house parties" and discuss medical reform.

Laura Boylan, a New York City neurologist, hosted one such meeting in the living room of her family's apartment on Dec. 15.

"The questions they asked us to distribute to attendees didn't address the single-payer issue, but instead presumed that employer-based and private insurance would continue to take precedence," says Boylan, a local board member of the Chicago-based Physicians for a National Health Program.

Despite a fierce insurance lobby and an incoming administration pointed in another policy direction, Boylan and her 11 guests -- all doctors, nurses or health activists -- agreed they were prepared to back legislation to create a single-payer system, in which a publicly financed entity (a "single payer") reimburses providers for their services instead of having private insurers reimburse for these services, as they do now.

In 2006, California lawmakers approved a single-payer system in their state. Gov. Arnold Schwarzenegger vetoed it, claiming "socialized medicine is not the solution to our health care problems."

Despite this kind of philosophical aversion to their favored approach, Boylan and her allies note that the single-payer paradigm is succeeding in Canada and Europe and has majority support among physicians and citizens here.

A 2004 Archives of Internal Medicine survey showed 63 percent of doctors believe a single-payer system would provide the best care for the most people. A 2007 CNN poll showed 64 percent of Americans believe "the government should provide a national health insurance program for all Americans even if this would require higher taxes."

Obama's Stopgap Pledge

During his campaign, Obama pledged to preserve the employer-based private insurance system and create a stopgap federal program to cover the uninsured.

He is also expected to give serious consideration to a proposal by Senate Finance Committee chair Max Baucus, D-Mont., for mandatory insurance with private companies competing alongside a new Medicare-type program.

For advocates such as Boylan, legislative leadership is coming from Rep. John Conyers Jr., D-Mich., who in 2003 and 2007 introduced the National Health Insurance Act (HR 676) to create a publicly financed single-payer system.

"With 47 million Americans uninsured and 50 million underinsured, it's past time for change," Conyers recently told Women's eNews through a spokesperson.

Supporters of a single-payer system propose two possible funding methods. One would be a 3.3 percent payroll tax and a reversal of President Bush's tax cuts for the wealthy. Another would be to rely on payroll taxes of 8.17 percent for employers and 3.78 percent for employees. Advocates say that, despite additional taxes, a single-payer system would save citizens money.

Conyers' bill has been endorsed by only 93 of 535 members of Congress. Fourteen national labor groups and 20 health and civic groups, including the National Organization for Women and the Coalition of Labor Union Women, both in Washington, have lined up behind it. With Obama slated to take office in nine days, Conyers has pledged to hold hearings on his proposal in the House Committee on the Judiciary, which he chairs.

Geri Jenkins, co-president of the Oakland-based California Nurses Association, says the guaranteed health insurance of a single-payer approach is necessary when so many people are losing their jobs. "Unemployment recently surged to 7.2 percent, and for every 1 percent increase in that rate, 1 million more Americans are predicted to lose their health insurance coverage," Jenkins says.

Industry Opposition

The Washington-based America's Health Insurance Plans, an insurance trade group, argues a single-payer system could result in lower payments for health care providers and job loss in the health care industry, which employs 12 percent of U.S. workers. Of those 12 million workers, 80 percent are women, reports the National Institute for Occupational Safety and Health.

 Geri Jenkins

On Dec. 22, the Washington-based Progressive Democrats of America mobilized thousands to phone their congressional representatives and lobby for Conyers' bill. A second call-in day is set for Jan. 15.

Single-payer advocates say the current system is not only costly, but in crisis. More than 100,000 Americans die each year of treatable conditions because they are uninsured, underinsured or fall prey to health-care bureaucracy, according to a January 2008 study in the journal Health Affairs. "Such deaths account, on average, for 23 percent of total mortality under age 75 among males and 32 percent among females," noted the authors, who ranked the United States last among 19 industrialized nations in terms of preventable deaths.

Eighteen percent of women under 65 are uninsured -- largely due to financial constraints -- and since 2000, the cost of health premiums has increased six times faster than the median income, reports the Kaiser Family Foundation, in Menlo Park, Calif.

Linda Prine, a family physician in New York City, says she's seen women wait four months for Pap smears, be denied the prescriptions they need and die of treatable diseases because they can't afford adequate health care.

'Bureaucracy Threatens Lives'

"The current American health care system is plagued by so much bureaucracy that it's a threat to patients' lives," says Prine. "That's why I've joined the push to urge Obama to replace this system with a single-payer one, which would offer affordable, continuous, universal care."

Prine says her practice deals with 52 different health care plans. "All have different payment schemes and paperwork. But under a single-paper system, this bureaucracy would be replaced by a streamlined electronic medical records system."

Instead of a patchwork of private insurance companies that functions as a market-based regulator of costs, covered services and providers, the single-payer system has a public or quasi-public agency pay medical providers. Costs are controlled through bulk purchasing, negotiated fees with suppliers and service providers, and global budgeting, which pays providers from a pooled budget versus a system of itemized, one-by-one claims.

The mixed system of private and public medicine in the United States spends $7,026 per person on health care annually, while countries with single-payer systems spend an average $3,840, reports the Paris-based Organization for Economic Cooperation and Development. A single-payer system would save $350 billion in annual paperwork, enough savings to provide care to all without costing more, reports Physicians for a National Health Program.

"With private insurance, rather than send a patient with chronic alcoholism and liver disease to the detox program where she could get the best care, I have to send her wherever her insurance company dictates she should go, even if it's not to a qualified specialist," says Claudia M. Fegan, a physician in Chicago. "In a single-payer system, I could offer her the treatment she really needs."

Under Medicare, a single-payer system is already in place for U.S. citizens who are over age 65 or who have permanent disabilities. The Medicare program spends 3 percent of its revenue on administrative costs, while private insurers spend 30 percent or 10 times as much, according to the Chicago-based American Medical Association and the New England Journal of Medicine.

"Health insurance costs the average family $8,000 to $10,000 annually, minus co-pays and the cost of drugs," says Jenkins of the California Nurses Association, referring to households that either receive employer-based benefits or pay for their own insurance. "But single-payer insurance would likely cost them less than this in taxes each year."

Copyright 2009, Women's eNews. All rights reserved.

Molly M. Ginty is a freelance writer based in New York.