AEA Healthcare Update Archives

July/August 2008 Update

Obama Sees Expanded Role for Government in Helping Individual Americans Pay for The Cost of Their Health Insurance.

Can America join the list of nations with affordable and effective insurance coverage for all its citizens? Senator Barack Obama has announced the centerpiece of his strategy to achieve universal coverage will be to offer the Federal Employees Health Benefits Program, the same plan that currently insures U.S. Senators, Representatives their families, to any American who wants to purchase it. Under the Obama plan, health care professionals, hospitals and other medical facilities would remain largely private as they now are, but open enrollment in the Congressional insurance plan would hang a National health insurance safety net in place of the gap in coverage that has left 50 million Americans without health insurance.

In addition, the Obama plan would employ many of the elements of the health insurance reform model largely pioneered by various States:

• Employer mandates: requiring employers to provide health insurance or contribute to a government subsidy fund.
• Financial assistance to those who cannot afford market rate insurance.
• A central information clearinghouse, the National Health Insurance Exchange, to set national minimum standards and share information on all available plans.
• Expanded eligibility of Federal programs such as Medicaid and State Children's Health Insurance Plan (SCHIP) to insure more low income adults and children.

The Obama plan however departs from most state reform plans in its omission of an Individual Mandate. This is a legal requirement that everyone must carry some form of insurance or pay a fine. Sen. Obama's position is that effective cost saving measures will make insurance premiums affordable enough that most people will voluntarily opt for coverage over the risk of going without insurance. In the absence of lower prices, individual mandates are likely to be ignored or unfairly punish low and moderate income Americans.

The Senator recommends improved prevention to contain costs- a healthier populace reduces demands on the health care system- and more technology advanced information exchange and record keeping. The application of internet storage and communication of health records and treatment protocols has an avid following and is popular with policy makers.

While the use of new media is attractive, the real cost of transferring the nation to a single billing and health data management system is unclear as are or the cost savings once such a system were in operation. The staging of so vast a database might prevent a full and accurate accounting of the benefits for many years to come.

The Obama plan does, however, offer more immediate financial relief. In addition to subsidizing those who cannot afford the going rate for insurance premiums, Obama proposes to create a Government assistance program to help employer-based plans offset the high costs of treating catastrophic illnesses such as cancer and heart disease.

The cost to the tax payer of the Obama reform package would be considerable, but many experts believe that only an infusion of Public money will be able to slow, then reverse the negative trends of spiraling costs and growing population of the uninsured. The source of those extra revenues is still under consideration. To date, the Obama campaign has rejected the idea of taxing employee benefits as one method of raising new funds.

Senator Obama has made it clear that he does not endorse a Single Payer Insurance reform solution. His philosophical approach, however, does envision the Federal Government as a major player in setting the proper conditions for success and that Public policy makers, insurance operators and the general public will have to work together to achieve affordable, universal coverage.

June 2008 Update

Senator McCain Backs Free Market Solution to Health Care Reform Targets Employer Based Coverage

By Jack Goldstein

On campaign stops in Florida and Pennsylvania in April, Senator John McCain fleshed out some of his proposals for National health care reform. The presumptive Republican presidential candidate proposed a sweeping challenge to employer based insurance coverage that would affect the 71 percent of Americans who currently get their insurance in the workplace. Central to his proposal are the following.

• Health care benefits would be treated as wages and taxed as income producing an estimated 212 billion dollars in new taxes.
• Individuals would be given $2500 and families a $5000 income tax credit to offset the higher taxable income if they remain insured through their employers or against the cost of private insurance.
• Insurance companies would be able to do business across state lines.

The avowed intention of the plan is to move more Americans out of employer-based health care plans into the private insurance market as individuals. Supporters of free market reform maintain that with more people in the marketplace shopping for coverage, and fewer regulations governing the industry, insurance companies will become more competitive and hence the cost of insurance will come down.

By taxing health care benefits as wages, the McCain plan would also eliminate the corporate tax deduction businesses currently take for insurance expenses and hence remove the major incentive companies have for offering such benefits. The impact could be wide spread throughout the American economy, forcing millions of employees to seek coverage in the private market. The plan would potentially result in the proliferation of new insurance companies and increase the number of policies. That, some analysts say, would bring the price of insurance down through competition while others say it would only further benefit an industry whose need for profits many already see as a major inflationary factor in the cost of premiums

Other concerns with the McCain plan focus on insurance regulations and the possibility of increased medical discrimination as more individuals face off against insurance companies and those companies are allowed to do business across state lines. Most employer based plans cannot discriminate against individuals with pre-existing conditions while in many states insurance companies may refuse to cover such individuals seeking coverage. Insurers could be encouraged to relocate to states with weak insurance regulations, and many of those who most need insurance will be less likely to find it.

The McCain plan reflects the basic principles of a market driven approach to the health care crisis. While it is unclear how much of his proposal would be able to pass Congressional or voter muster, it does signal the Senator's strong willingness to work through an expanding private insurance industry to solve the Nation's health care ills.

This column will report briefly on the health care proposal of the presumptive Democratic candidate in the next issue. .

May 2008 Update

Support for a single payer system of national health care is gaining momentum throughout the Labor movement. Equity first endorsed the single payer concept - or government provided health insurance - in the early 1990's. Council resolved at that time to "… participate in the formation of a national coalition of labor organizations, health care suppliers and public interests groups…, the goal of which is the adoption and implementation of a single-payer, universal, comprehensive national health care plan."

With the defeat of President Clinton's health care initiative and a period of economic growth in which health care costs remained steady, the call for a single payer plan lost momentum, an interest which is now coming to the forefront again with health care costs rising out of control and over 47 million Americans unable to afford even basic coverage.

Health care advocates and Labor leaders are focusing their attention on House Resolution (HR) 676, Medicare for All, a bill introduced by John Conyers Jr. (D-MI) in 2003. HR 676 would provide universal health coverage by making every American citizen eligible for the Medicare system that is currently only available to people over 65.

None of the major Presidential contenders has endorsed HR676 as yet, but the Bill's supporters are encouraged by the fact that it has been inked by 400 union organizations including 103 Central Labor Councils or area Labor Federations and 33 state AFL-CIOs.

Equity's position in favor of a single payer system is consistent with the aims of HR676 and the Union is examining the Bill. At the same time, the Association is working with sister unions, advocacy groups and Government entities to improve the health care safety net at State and Local levels and supports incremental steps leading to National health care for all.

In the coming months, as the nation draws closer to the Presidential vote, this column will layout the various proposals for single payer and other reform proposals, take a look at each candidates' positions on health care and to report on the membership can help influence the nationwide efforts to reform health care.

April 2008 Update

In March, the Health Care Reform power point presentation was given to the Western Regional Board. The presentation was developed to make the health care debate understandable to the membership at large, demystifying basic terms and concepts predominant in the health care reform discussion.

At press time, the Central Regional Board presentation is scheduled for April 7th with a future date for the Eastern Regional Board still to be confirmed. Over the coming months, staff members, trained in the power point, will travel to liaison cities to give the presentation.

Following the lead of Massachusetts, Maine and Vermont, New Jersey legislators unveiled a proposal in mid-March that will require all residents to have health care coverage within three years. We are researching how this will impact our members who reside in New Jersey.

California School Employees have endorsed HR 676, a single payer healthcare legislation introduced by Congressman John Conyers (D-MI). HR 676, which has 88 co-sponsors in the U.S. House of Representatives in addition to Conyers, has been endorsed by 387 union organizations in 48 states, including 95 Central Labor Councils and Area Labor Federations and 33 state AFL-CIOs.


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