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The Sickly State of Health Insurance

Health care in the US has gotten so bad that even the wealthy find themselves gasping at the soaring premiums.
 
 
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The following is an excerpt from Jacked: How "Conservatives" are Picking your Pocket (Whether you voted for them or not) by Nomi Prins, PoliPointPress, 2006.

What do a successful ABC television producer, an ex-Los Angeles Laker turned actor, and a former meth addict turned PR god all have in common? First, they all spend way too much time in LA traffic. Second, they all think America's current health-care system sucks.

Poncho Hodges is a 34-year-old former LA Laker. He's the tallest person I've ever stood next to. I walk with him (Poncho used to live in New York, so is down with the whole walking thing) to a nearby Starbucks, on Magnolia and Lankershim Boulevard. My all-black outfit (yes, it is a New York thing) looked a little grim next to his red and white Yankee cap and red and white sneakers. His face was framed by bling studs and a thick gold chain necklace.

Poncho attended the University of Colorado on a basket-ball scholarship. He did a stint as power forward for the Lakers. He's perfectly healthy now, but having witnessed tons of sports injuries in his career, he knows the importance of coverage. "Health insurance?" he says with a voice as deep as James Earl Jones. "Been winging it."

Like other members in the Screen Actors Guild and vari-ous professional groups or unions, he gets insurance through group policies that are imbedded with obstacles. "I got the SAG one, but you need to gross like $15,000 a year to keep it. You have to gross about $25,000 to get dental."

For seven years, he played basketball all over Europe, and learned from his time there: "America needs to take lessons from other countries where if you're a citizen, you get health care, no matter who you are." Ideas like this separate Poncho from the thinking of our gov-ernment, even though he considers himself a Republican. "I like the things they stand for -- like on religion -- and I'm down with keeping American traditions. On the economic thing, it's different -- they don't care about the poor, they're too privileged." He is further proof that the need for decent health care cuts across political beliefs, and he is one more example of how out of touch conservatives are even with their own constituents.

After Poncho takes off in his size 15 Nikes, I have another latte. For this one, I'm joined by Jed Wallace, a super-lively PR person. Jed has an expensive individual health insurance plan, which also covers his two young daughters. He got it on-line. "It's Blue Cross/Blue Shield -- over $800 a month, a $10 deductible on office visits, $30 on prescription drugs, $500 on ER work, and an annual deductible of $750." Part of the reason the plan is so expensive is Jed's former ultra-Hollywood lifestyle. He craved the dream: "I wasn't exactly sure how, but my ego said I wanted to be rich and famous -- then you get pummeled by reality."

Reality for Jed started with smoking pot, then doing hallucinogens. It soon became a full-blown meth addiction. During the mid-'90s, he co-hosted a web radio spot and "Popcorn," a movie review show on MTV. He made, as he put it, "shitloads of money, burned through it, and started doing coke." MTV was short-lived, so he got into the bar business in Santa Monica. "It was 'on' from there -- partying, drugs, everything."

By April 2000, he was cruising high. The manager of one of the beer companies he bought along the way happened to be his drug dealer. "I was working 20- to 22-hour days -- I had to get into meth, the delusion that with a little, you could do anything."

He rationalized that he provided his two-year-old and wife with a home, money, and cars. He paid employees in drugs. Finally, his wife left him. Eventually she returned and created an inter-vention that led him to Life's Journey Center in Palm Springs. It was, as he put it, "a humbling experience. There, we also discovered I was bipolar -- that's why my insurance is so high."

Now, he speaks to kids in recovery through Alcoholics Anonymous. "Lots of people in treatment wind up dead, back on drugs, or in jail. I'm lucky. People helped me. 'Cause it's not covered by insurance." He's been clean for two years, having been to hell and back, and has met tons of lost people along the way. Many of them, he believes, were souls that could have been helped by wider reaching health care. "This government is totally detached from the real American psyche and spirit," he says, driving me back to my car. "You parked all the way over here?! Why?"

The next day, I hit ABC Studios, where it was definitely turning Christmas. A young intern was passing out ginger-bread cookies while I waited for Harry Phillips, a producer of Primetime. After a few minutes he arrived, a friendly man with a neatly trimmed gray beard and mustache, and offered me herbal tea from their kitchen.

Behind his desk are several bags of Christmas presents, mostly for his youngest daughter, Abigail. "She's 12 going on 20," he says. On his walls are several Emmy awards, a map of the United States, and a Norman Rockwell print of a young black girl in Mississippi.

He's been at ABC for 16 years. His health plan is through Disney/ABC, and is CIGNA/PPO, for which he pays $250 a month with a $350 annual deductible. Born in Canada on Memorial Day in 1952, he has been in the United States for 15 years but maintains dual citizenship. The biggest reason why? Yep: "Health care--socialized medicine." As far as he's concerned, Canada just flat out gives its citizens better care than we do. And it's hard to argue with him. Canada has the equivalent of an interlocking system of Medicare and Medicaid. Everyone's in the same risk pool and there are fewer administrative costs.

His ABC health-care plan is a good one, and Harry knows it. He also realizes how lucky he is compared to many of us: "I'd be willing to give up some of that privilege in return for others to have more access to health care in the U.S." Meanwhile, Harry is holding onto his Canadian national health care (CARE) card and his home in Canada because "retiring there makes a lot more financial sense." Sadly, most of us don't have this option. And after all, should we really have to feel "lucky" to have decent health care?

Rising Health Care Costs and Your Wallet

The private health-care system is filled with waste. In 2003, health-care bureaucracy cost the Americans who use it $400 billion. And health insurance companies don't even actually provide health care . It's not like GM, which provides cars (or tries to anyway).

Let's make no mistake about this: insurance companies are middlemen. Their sole job is to connect the dots that stand between you and your medical treatment. More often than not, it seems like their job is actually to create red tape between you and your wallet. Why do we put up with them? Because these companies are so entrenched in our daily lives that we can't imagine an alternative. But there are other options, whether or not the Bush conservatives want to acknowledge them. A recent study found that national health insurance, financed by the federal government instead of private insurance companies would save Americans about $286 billion annually in paperwork alone. This would be enough to give all uninsured Americans full prescription drug coverage.

President Bush goes out of his way to ignore these obvious statistics. He goes out of his way to bolster our current system, which is only getting worse. Medical expenses rose faster than inflation in the 1990s as insurance companies created plans to limit our treatment options through something they like to call "managed care." To me this translates as: we manage our (enormous) profits, you wing your (shoddy) coverage.

On top of that, the costs of plans have increased. Between 2000 and 2005, average monthly premiums for individual cov-erage shot from $342 to $603, and annual deductibles (the amount you put out before your insurance kicks in) almost doubled, to $323 from $175.

To make sure drugs companies weren't left behind as health insurance companies grabbed their enormous profits, the Bush Republicans introduced the prescription drug bill -- or "Medicare Part D"-- for Medicare beneficiaries, the 42 million Americans who are disabled or 65 or older.11 In far from conservative wisdom, the bill doesn't include the ability to bargain with drug companies for lower cost drugs. Since its inception, drug companies have substantially raised prices on nearly all drugs covered by the program. Plus, the cost of this drug-company orgy to our federal budget is projected to be a staggering $8.7 trillion between now and 2080.

The Medicare prescription drug bill was part of the 2003 Medicare law and took effect in January 2006. Your first $250 of drugs is free. Then comes the cloud, looming behind that slim silver lining: you pay a quarter of costs from $251 to $2,250, and all of the next $2,850. That "doughnut hole" lasts until you hit $5,100 in drug costs per year. After that, Medicare picks up most of the tab. All in all, the gap in coverage has only increased with the new plan, and with it, out-of-pocket expenses for the average participant. By January 2006, less than half of the elderly able to sign up for the prescription drug plan did. Why? The sign-up process was nearly impossible to figure out.

"The Bush administration knew that going in," Diane Archer, founder of the Medicare Rights Center, told me. "They banked on it. They didn't even keep the right to negotiate prices with the drug companies. Others who did sign up didn't get their plastic ID cards that confirmed they had, so they couldn't get the drugs they needed." And the problems aren't limited to the people who need those drugs. Before the bill, Medicare's overhead was only 4 percent of its total cost to the federal budget. After the prescription plan was adopted, overhead tripled. Nevertheless, Bush has decided the program is a raging success.

Unfortunately, Bush is not alone. Drug and health insurance companies felt the love that average citizens didn't feel, as they were second only to oil companies in 2005 stock market performance. Once again, those companies book the profits, and we Americans foot the ever-growing bill.

Nomi Prins is a senior fellow at the public policy center Demos and is the author of Jacked: How "Conservatives" are Picking your Pocket (Whether you voted for them or not) PoliPointPress, 2006.