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ANALYSIS: Think again

A health plan for desperate Democrats

By TIM NESBITT

If you want an example of health care reform gone wrong, don’t look to Washington, D.C., where Republicans and Democrats have been arguing over marginal, market-based reforms like health savings accounts.

Look to the blue state of Massachusetts, where legislators from both parties recently teamed up on a bipartisan foray into “health care for all.” Their plan, celebrated by Republican Governor Mitt Romney and Democratic Senator Ted Kennedy, tells working families whose employers don’t provide affordable health insurance to do what even the Bush Administration hasn’t had the nerve to tell them: Buy your own.

That’s right. In Massachusetts, beginning July of next year, working people who don’t have health insurance will be required to buy it for themselves or face steep tax penalties if they don’t. And those who earn more than $29,400 per year will have to pay full premium prices for whatever health insurance plan the state can negotiate with private insurance companies.

This “employee mandate” in Massachusetts is likely to cost working people whose employers don’t provide affordable health insurance about $300 per month. Meanwhile, a paltry “employer mandate,” enacted over Gov. Romney’s veto, will charge employers who don’t provide health insurance for their workers just $295 per year.

You can do the math as easily as the bean counters in corporate headquarters around the country. All companies doing business in Massachusetts will soon have the option of paying $25 a month per employee into the state’s health care program or paying $300 to $800 a month or more to provide health insurance for each employee and his/her family.

You don’t have to be an actuary to figure out where this system will take us. More employers will dump health insurance for their workers. More workers will have to buy their own health insurance. And the state will have to pour more of the tax dollars paid by working families into health insurance subsidies for the working poor.

This is what happens when politicians capitulate to business lobbies that oppose employer mandates, cave in to insurance companies that want to pad their book of business and cater to hospitals who want to offload their responsibility to treat the uninsured. When none of these special interests is challenged to give a little to achieve a more affordable and accessible health care system in this country, working families have to give a whole lot more.

We saw these dynamics play out in the Medicare prescription drug bill enacted by Congress in 2003. But that bill was crafted and passed by Republicans, who were beholden to the pharmaceutical, insurance and hospital lobbies and ideologically committed to market-based health care models that shift more costs to consumers. Very few Democrats in Congress supported this bill, and Sen. Kennedy led the charge against it in the Senate.

So why would Democrats like Kennedy and the party’s legislative leaders in Massachusetts capitulate like this? You can blame a certain coziness with insurance and hospital interests for some of their decisions. But I think desperation played a larger role.

Democrats, like many Americans, are desperate for solutions to our health care crisis that can extend coverage to the ever-growing ranks of the uninsured. And when that cause becomes your single-minded focus, you tend to take for granted those who have insurance and focus on those who don’t. But, that’s a fatal mistake. If you ignore the role of employer financing in our health care system, you may as well accept a “single payer” system in which working people are the single payers – at $300 per person per month in premiums and hundreds if not thousands of dollars more every year in deductibles and co-pays.

A majority of Americans still get their health insurance from their jobs or a family member’s job at prices far less than what residents of Massachusetts may soon be paying. Their numbers are declining every year, as costs increase for employers and workers alike. But these trends are not inevitable. Employment-based health care may not be sustainable as it is currently structured. But a system by which workers earn their health care from their jobs is a righteous one in the minds of most Americans and one that most Republicans don’t usually challenge.

Employers’ responsibility for paying for health care for their workers has to remain on the table if there is any hope of solving our health care crisis without shifting all health care costs to working families.

Reasonable compromises are possible. Many Democrats and some Republicans have proposed public financing for children’s health care and employer financing for working adults. That would certainly be a better deal for working families than what Massachusetts is planning.

But Democrats in particular need to get beyond their desperation and show a little more determination to defend the benefits of a system that rewards hard-working Americans with affordable health care. That means standing up to the special interests that are profiting from our health care cost crisis and challenging employers to do the right thing for their workers.

Tim Nesbitt is former president of the Oregon AFL-CIO.