“You see, a bank or a company…those creatures don’t breathe air,
don’t eat side-meat. They breathe profits;
they eat the interest on money.
If they don’t get it, they die the way you die without air.”
The Grapes of Wrath, p. 43
When I was young, at the end of the day – before my father came home from work – mom was charged with making sure the five kids were fed, washed, dried, and put away.
The last thing dad wanted was communication, which, like noise, he abhorred. My parents had complete faith in the inherent ability of children to mature with virtually no interaction (really) whatsoever anywhere or at any time, and as a product of this parental practice, I gotta say it was not very well thought out. Believe me, there was a ton of cerebral “down” time which could have been put to good use. Not only did I develop slouching synapses, but my cognitive-conditioning skills were, in a word, lazy.
It’s fair to say, during my formative years, the information processing part of my brain spent an eternity “in queue”.
And I guess because of that self-reflective realization, I’m particularly aware how often people are not challenged to exercise their brainpower to its fullest capacity. Understand: Our minds can process amazing tidbits, but only if we have access to communication and data, and preferably facts, not some corporate-engineered, corporate-controlled information clearing house of cards (think any major media outlet, lobbying group, Superpac fund, etc.).
To solve our problems, We the People need honest, instructive, meaningful, and interactive information. Give us the tools, and we’ll get the job done.
Of course, in America, under our economic system, that’s next to impossible.
I mean, never in my wildest dreams did I think Americans would willingly become more dumbed down than I was some 40 years ago.
The Supreme Court’s recent decision to uphold the law known as The Patient Protection and Affordable Care Act (PPACA) is a perfect example. Here, we have a gross breakdown in viable communication. I say this because every time I hear the crowd parroting the totally inaccurate phrase “government takeover of health care,” I cringe. Why? Because not only is PPACA a gift on a silver platter to the entrenched forces of greed (FOG) such as the profit-first health insurance industry, but it further unjustly enriches the greedy clutches of the hospital industrial complex and the price-gouging pharmaceutical industry. How in God’s name is giving no less than $447 billion of our tax dollars every year to private industry a government takeover?
It’s not. But it is corporate welfare.
The New Health Care Law
On June 29th, the highest court in our land said in its decision on PPACA:
(1) It is constitutional to dictate every American purchase a defective, inefficient, wasteful private product to “manage” our health care (by upholding that the mandate is a valid exercise of the taxation power. That decision was 5 to 4);
(2) But even more shocking, it is unconstitutional to force the states to cover the poorest of the poor (by ruling there would be no loss of federal matching funds if states don’t want to expand Medicaid to cover those who fall between 100 to 133% of the poverty level. That decision was Seven to Two!)
So according to The Supreme Court:
Feeding the billion dollar profit-first, private health insurance industry with taxpayer dollars = good.
Helping people who live in poverty with the same taxpayer dollars (perhaps working for our number one private employer, WalMart) = bad.
Okay, so then let’s think about it and ask ourselves: What does private health insurance add to our health care system?
Before you answer, consider they take our premium dollars (PPACA contains weak language specifying insurers must explain why they are increasing premiums each year by more than 10%, and most likely after the explanation, they’ll be allowed to do it anyway.) and are allowed to keep 20 cents on every dollar as administrative cost and profit (the 80/20 rule). So, right off the top, they can legally skim twenty percent. What other industry would (transparently) think of doing this? Put another way: What company would you consider doing business with who – up front – told you they’d take a minimum of 20 percent “as the cost of doing business”?
Me thinks the invisible hand – always in our pockets, wallets, and purses – needs a big giant slap.
But thanks to the Supreme Court’s decision, under PPACA, private health insurance companies are permitted to spend only 80 percent (which they will fight tooth and nail – now that the Supreme Court has their back – to whittle down to 70 percent) on actual health care! Who wrote this law? Tony Soprano? Why would we want a health care system who takes a leg-breaking 20%?
According to the Kaiser Institute, last year’s health care expenditures were $2.5 trillion (approximately $8,000 per American), so, given 20 percent at a minimum will continue to be extorted, anyone thinking health care costs will decline is delusional. I mean, what is their incentive? They’re pocketing at least 20% – with a pre-approved, nine percent annual increase.
And again, not to belabor the thought, but how does, say, a hospital spending hundreds of millions of health care dollars a year (totally allowed under PPACA) on full page color ads in The Sunday New York Times or any one of thousands of newspapers, magazines, billboards, radio, internet, or TV ads boasting treatment of some rare ailment affecting one point five percent of the population help you when you need an emergency appendectomy? Gosh, wouldn’t it be nice to use some of that back-patting promotional funding to keep the aggressive collection agents off your behind? Under PPACA, the changes articulated in the new law are spineless regarding collection practices for nonprofit hospitals (you know, the entities bestowed special tax-exempt status in return for providing a community service):
(a) Nonprofit hospitals must make available their financial assistance policy which indicates the eligibility criteria for assistance including the basis for calculating the amounts that will be billed to patients. (Okay, so why isn’t this already happening? We need a law to enact this?) Further, the hospital must tell the patient how invasively they’re going to pursue the late or nonpayment of charges;
(b) Nonprofit hospitals may not use gross charges – known as “chargemaster” rates (translation: inflated by as much as 1,000 percent) – to those individuals who qualify for financial assistance. (Again, isn’t this common sense? If you qualify for financial assistance and don’t have insurance or are under-insured, isn’t it obvious you can’t pay the basic rate, let alone the inflated one?);
(c) Nonprofit hospitals may not undertake “certain” extraordinary collection actions – even if those actions are permitted by law – without first making “reasonable” efforts to inform the patient of their financial assistance policy and determine whether the patient is eligible. (So they can’t arrest anyone before telling them: “Uh, pay up or you’re going to jail.” That’s progress?)
Nonsense Which Is Allowed to Continue
Here’s an oldie but a goodie: Recently I received a note from my health insurance company informing me of its new look:
“Your new ID card has arrived!
You may notice a change in our logo. Vibrant and flexible, it’s a sign of our new outlook. It shows our passion for helping you feel confident about your health care decisions and making it easier for you to live healthier.”
Here is the transition:
The old logo
The new logo
You can’t make this stuff up.
Without exaggeration, it’s fair to estimate Aetna (excuse me, aetna) spent between $10 million to $50 million developing this new logo (consultants, market research, promotional testing, advertising, changing logos on letterhead, envelopes, invoices, ID cards, inquiries, denial letters, appeal letters, decision letters, corporate offices, airplanes, signs, paychecks, W-2s, 1099s, business cards, purchase orders, etc.).
But there’s more. Here, aetna describes its concern for the ecology:
“Our new ID card is also more earth friendly. It is as sturdy as previous cards. But once it’s thrown away and in the landfill, the plastic card will break down in less than five years without leaving toxins.”
Wow! Okay, question: What if I throw the card away in say a giant Hefty bag? I mean I understand without exposure to sunlight, those bags could take 1,000 years to decompose.
How does marketing and producing ecologically-friendly ID cards help you when you need treatment for a broken arm or a ruptured spleen?
MAJOR COMPONENTS OF PPACA
Children under age 26 may be allowed to continue coverage under parent’s plan
Children between the ages of 19 to 25 whose (1) parents are still employed and (2) whose employers actually offer affordable health insurance are allowed to stay on or enroll in their parents’ plan until age 26. This benefit, which caters to the healthiest risk pool of beneficiaries, covers approximately 2% of Americans.
Credits for Small Businesses
PPACA allows tax credits to small employers with less than 25 full time employees (FTE) with annual average wages of not more than $50,000, but really not more than $25,000 (because phase out begins at compensation over $25,000); further, the premiums paid must be under a “qualified arrangement” meeting certain requirements which include, but are not limited to, the fact that premiums paid must be less than the average premium as determined by the Department of Health and Human Services (Revenue Ruling 2010-3) which sets forth the average premium rates for the small group market for areas within some states (sub state rates).
The IRS explains the calculation (from their website under “Frequently Asked Questions”):
“If the number of FTEs exceeds 10 or if the average annual wages exceed $25,000, the amount of the credit is reduced as follows: If the number of FTEs exceeds 10, the reduction is determined by multiplying the otherwise applicable credit amount by a fraction, the numerator of which is the number of FTEs in excess of 10 and the denominator of which is 15. If average annual wages exceeds $25,000, the reduction is determined by multiplying the otherwise applicable credit amount by a fraction, the numerator of which is the amount by which average annual wages exceed $25,000 and the denominator of which is $25,000. In both cases, the result of the calculation is subtracted from the otherwise applicable credit to determine the credit to which the employer is entitled. For an employer with both more than 10 FTEs and average annual wages exceeding $25,000, the reduction is the sum of the amount of the two reductions. This sum may reduce the credit to zero for some employers with fewer than 25 FTEs and average annual wages of less than $50,000.”
The Donut Hole
For Medicare D prescription drug beneficiaries, the donut hole will eventually be reduced and ultimately closed by 2020. Medicare D (a gift to the pharmaceutical and health insurance industries under the George W. Bush administration) is managed by the profit-first health insurers who offer tens of dozens of complicated plans and whose monthly premiums are deducted from Social Security benefits. When factoring in premiums (approx. $450), deductible (approx. $310), co-pays (approx. $620), donut hole (approx. $1,750) and the 5% copay for the balance of drugs, it is reasonable to consider a Medicare D beneficiary could pay over $3,100 per year for medications. Even after the donut hole is promised to be closed eight years from now, Medicare D beneficiaries will still be responsible for (a) ever-increasing premiums (b) deductibles and (c) co-payments of at least 25%.
Currently hospitals receive income from sources they invoice for patient services rendered – literally tens of thousands of entities who have dozens of special programs including, but not limited to, Medicare, Medicaid (including disproportionate hospital payment plans), charity care, Tricare, state children’s insurance programs, liability insurance, homeowner’s insurance, auto insurance, worker’s compensation, collection agencies, attorneys, and the thousands of private insurance companies. It is redundant, burdensome, and wasteful. Additionally, there is no one watching the store. Hospitals pay out millions of dollars for special interest consultants, marketing, advertising, promotional brochures, collection, and to top employees who receive outrageous perks such as salaries in the millions, severance packages, special deferred compensation plans, chauffeurs, car services, maids, travel advances, housing allowances, the list is endless.
Nothing under PPACA changes any of this.
Penalties for Individuals
A penalty is imposed on individuals (paid through filing of personal income tax returns) who do not have “minimum essential health coverage”. The penalties start at the greater of $95 or one percent of income in 2014 and jump to $695 (this is per person) or 2.5 percent of income. Translation: for a family of four with income of $90,000, at one percent of income, the penalty in 2014 would be $900, in 2015 it would be $1,800, and in 2016 – $2,250.
Penalties for Businesses
The law does not specifically – in so many words – require employers to provide health insurance for their employees (and many large corporations have already received waivers from the government exempting them, thereby pushing the mandate back on the employee including, but not limited to – Cracker Barrel, Jack In the Box, Ruby Tuesday, Waffle House), but starting in 2014, large employers (50 or more employees or full time “equivalents”) will be assessed a penalty if they don’t offer “minimum essential coverage”.
The penalty is $2,000 per year, per employee, imposed per month for each and every month that “minimum essential coverage” is not offered. The penalty is not tax deductible.
Additionally, there is a $3,000 penalty for these same employers who offer “minimum essential coverage” to their employees, but some employees, who fall below 400% of federal poverty level, chose instead to opt for coverage in one of the state-established exchanges. The penalty is assessed on the number of employees purchasing through the exchange. The penalty is not tax deductible.
Required Minimum Coverage
In determining whether health coverage is affordable, household income is reviewed and verified based upon the most recent tax filing. Note: household income is increased for any portion of coverage made through an employer salary reduction plan (thus excluded from federal wages). The federal poverty level for a family of four in 2011 is $22,350. So, at the poverty level, this family would be required to pay eight percent of income or $1,788.
Deductibles and co-pays will be allowed to be as much as $5,000 (single) to $10,000 (family). This is in addition to the premium payments.
Post-Retirement Health Insurance Liablities
Many, if not all, states are facing serious unfunded liabilities for their workers’ post-retirement health care benefits. As of 2008, The Pew Center on the States reported unfunded liabilities totaling $557 billion. New Jersey’s unfunded liability is estimated to be at least $47 billion.
PPACA does not specifically address the cost of unfunded post-retirement health care.
Change in Schedule A Deduction for Medical Expenses
Under PPACA, beginning with the filing of 2012 federal tax returns, the floor for deducting medical expenses claimed on Schedule A will increase from 7.5% of adjusted gross income to 10%.
Senior citizens will be exempt from this change until 2016.
The Massachusetts Health Plan
In 2006, then Governor Mitt Romney, signed legislation enacting The Massachusetts Health Plan whose goal was to provide universal coverage for Massachusetts residents by imposing mandates to purchase health coverage. PPACA is modeled after this plan.
Despite the mandate, Massachusetts residents continue to file for bankruptcy over unpaid medical bills, many unable to seek care due to high co-pays and deductibles, hospitals continue staggering layoffs of employees. One of the worst aspects of the law allows the State to collect penalties and fees from people without coverage. Here are the numbers:
2008 Penalties collected = $12.4 million
2009 Penalties collected = $15.4 million
2010 Penalties collected = $17.8 million
2011 Penalties collected = $21.1 million
2012 Penalties collected so far this year exceed $20 million
Since its inception, the state of Massachusetts has collected almost $100 million in penalties under its health care law – from people too poor to afford health insurance. Talk about taking a pound of flesh!
What is the point of having health insurance if you can’t afford to use it – other than to swell the coffers of the profit-first insurance industry?
We Already Have the Solution to Our Health Care Problems
America already has two health care systems which (a) run more effectively (b) cover everyone in their stated group (c) with tremendous efficiency and (d) less overhead: (1) The Veterans Administration (socialized health care in existence for two centuries treating the most critical patients and maintaining one of the largest and most modern systems of medical records in the world) and (2) Medicare (treating the elderly and disabled since 1965).
A comparison of overhead:
PPACA = 20%
Medicare = 5% (including a fraud detection unit)
Veterans Administration = less than 3% (National Academy of Public Administration Report Sept. 2011)
So the question is: Why not expand either of these two time-tested, proven, successful systems instead of creating a 2,300 page boondoggle which, at the end of the day, no one will understand anyway and, according to the Congressional Budget Office, when fully implemented five years from now will still leave as many as 26 to 30 million without access to health care?
This is asinine. Fact: No less than 30 other countries have truly universal health care, covering all citizens without forcing them into homelessness or compromising care, at lower cost. For God’s sake, even dictators give their citizens universal health care (Libya, Cuba).
So are we saying we’re number one in cluster bombs and stupidity?
What if we were to eliminate two words from the Medicare Act of 1965: “over 65”, and then it would cover everyone, cradle to grave?
What if we were to improve the program by throwing out all the private health insurance companies (like Medicare Advantage plans)?
What if we were to expand Medicare to include all medically necessary procedures?
We have the tools in place. We have the polls behind us showing a super-majority of Americans want the benefits and results of what is consistent with a truly universal health care system. Improved and Expanded Medicare for All is synonymous with Universal Single Payer Health Care. It seems to me a single-payer system would be sane (not 2300 pages), simple (eliminating the redundancy and waste), and equitable (everyone in, no one out).
(In fact, this has already been done in Libby, Montana where citizens, exposed for years to asbestos extracted from a vermiculite mine by workers employed by the WR Grace Company, have been covered under Medicare for over 2 years.)
In addition, we already have the legislation in place – HR 676 – which has been introduced into congress every year by sponsor Representative John Conyers (D-MI).
Universal = covers everyone
Single Payer = one fund to receive revenue (through a progressive payroll tax like Medicare) and distribute payments to providers of care like private (doctors, labs, assisted living, etc.) and public (hospitals, hospice).
Health Care = no denial of coverage for medically necessary procedures including emergency care, preventive, primary, dental, vision, substance abuse, mental health, long-term care, prescription drugs, and palliative. Patients would have their choice of medical practitioner but would pay no co-insurance, deductibles, donut holes, or insurance premiums.
If we fully engage our synapses, we don’t have to re-invent the wheel.
The following is how the major components of PPACA would differ under a Universal Single Payer Health Care system:
(1) All children under age 26 would all be covered;
(2) Credits for small business would be unnecessary because the cost of single-payer is tremendously less than the cost of (ever increasing) premiums less tax credits.
(3) There would be no donut holes. All prescription drugs would be covered;
(4) Hospitals: HR 676 proposes a global budget for hospitals, a tried and true approach for hospital operation:
“Johns Hopkins was born on a tobacco plantation in Maryland where his father later freed his slaves nearly sixty years before Emancipation. Hopkins made millions working as a banker and grocer and selling his own brand of whiskey, but he never married and had no children. So in 1873, not long before his death, he donated $7 million to start a medical school and charity hospital. He explained the purpose of Hopkins Hospital was to help those who otherwise couldn’t get medical care ‘the indigent sick of this city and its environs without regard to sex, age, or color, who require surgical or medical treatment.”
The Immortal Life of Henrietta Lacks, pgs 166 – 167
Johns Hopkins died in 1883 and his hospital (cost $2 million) opened in May of 1879 specified the only patients to be charged were those who could easily afford it and that money should be spent treating those unable to pay. Johns Hopkins became one of the most famous and top-rated medical “teaching” hospitals in the country, operating successfully for over half a century on a global budget.
(5) There would be no penalties for individuals as coverage would be universal;
(6) There would be no penalties for businesses as coverage would be universal;
(7) There would be no required minimum coverage; everyone would be covered for all medically necessary procedures;
(8) States’ unfunded post-retirement health care benefits would be fully eliminated because everyone would already be covered.
Americans continue to be willingly dumbed down into believing corporations – whose sole purpose is to maximize profit and shareholder return – are the sole answer to every problem. We should not be giving them the power to maintain control over our lives for something which should be a basic human right.
We should look to what has already worked for us and expand and improve upon those successes. The best answer to our health care dilemma is to enact a sane, economical, simple system of universal single-payer health care (Improved and Expanded Medicare for All) which, aside from reducing costs (there are no less than a dozen nonpartisan research reports showing annual savings to be close to half a trillion dollars) and increasing employment (We’ll need more doctors, labs, nurses!) would take the “care” of our citizens without corporate control.
In his best-selling book Eating Animals, Jonathan Safran Foer wrote about his in-depth investigation into our corporate-controlled animal factory farms which genetically alter, drug, incarcerate, maim, torture, and slaughter 90 percent of our meat supply. He pointed out:
“What the (food) industry figured out – and this was the real revolution – is that you don’t need healthy animals to make a profit. Sick animals are more profitable.”
Yes, sick animals (or humans) are more profitable. So the next time you boast of making a “killing” on trading that health care stock, you are absolutely correct.