No light at the end of the tunnel for the uninsured: Medical-insurance profiteers undermine national healthcare

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4 SOCIALIST ACTION JULY 1991 Medicaid In 1988, Americans spent $542 billion on healthcare-12 percent of the gross national product. This was 85 percent more per capita than France, 131 percent more than Japan, and 171 percent more than Britain. But spending more money has not produced more healthy Americans, only more anxious Americans who wonder how they will pay their inflated medical bills.

The pain that Americans suffer from inadequate healthcare is also felt in the boardrooms of some of the nation's largest corporations. The directors of the multinationals are not suffering from untreated stomach aches but are feeling pain in their corporate balance sheets.

Corporations are incurring ever rising costs for their workers' health insurance. According to an article in the March 25 issue of The Nation, the Chrysler Auto Company pays $700 in healthcare for every car that it builds. In Canada, which has national health insurance, the health cost in the Chrysler plant is $225 a car.

This bothers American automakers, who must compete on a world market. Chrysler's chief, Lee Iacocca, complained recently, "Most of our foreign competitors have a $300 to $500 cost advantage over us just in health costs alone for every car and truck they build."

Cutbacks in coverage

Part of the excessive healthcare costs are rooted in the market-based insurance system corporate America supports. Like cost-plus military contracts, healthcare is delivered on a fee-for-service basis. There is no incentive to cut costs. Inflated charges are paid by insurance companies that raise the premiums to be paid by corporations and their workers.

Concern has been expressed by Richard Heckert, president of the National Association of Manufacturers (NAM). He told Congress, "I hope that none of us abandon our employees, but we are going to cut our losses."

When businessmen talk of cutting losses it usually means loading those losses on the backs of their employees. The healthTHIS ISTA LADY! care crisis is no exception. Employers are cutting benefits, making employees pay a larger share of the cost, and screening out workers who might have medical problems.

Nevertheless, employers can go only so far in cutting costs this way. Maintaining and expanding healthcare benefits has been the main issue in hard fought strikes in coal and other industries. In addition, growing numbers of retired employees are demanding continued coverage.

Now the problem is too big for industry to solve alone. In a recent poll, 73 percent of the executives of the largest corporations admit this fact and call for government intervention. They want the government to control medical costs and force their competitors to buy health insurance.

This is scarcely a comprehensive health plan, but the executives do not tavor "socialized medicine." They only want to pass their healthcare costs on to their competitors, their workers, and the taxpayers.

The multi-nationals cannot agree on a common program. At last count, six plans were before Congress. Except for one, they all propose buying more health coverage from the insurance companies that are creating the healthcare crisis.

Monopoly for insurance companies In his book, "In Critical Condition," Sen. Edward Kennedy indicts the insurance industry on many counts. He points out that many of the 1800 health insurers in America are controlled by physicians. This doctor-insurer complex is in no position to impose cost control on the medical industry.

Physicians dominate the boards that set Blue Cross fee schedules. Kennedy says, "They will never take a hard nosed stand on behalf of the people. They are set up to serve the providers, and depend heavily on the providers' support."

Since there is no competition on the price of medical care, insurance companies compete by designing glitzy policies that seem to offer far more than that they do. Health insurance coverage is so complex that few workers know what their policy will cover until they get sick.

The exclusions are buried in the fine print. This can result in financial shockas in the case of a mother with a sick one-week-old baby who required a $6000 operation. The insurer would not pay because the policy excluded the first 15 days of the infant's life.

More profitable to insurance companies is excluding whole classes of citizens: people with diabetes, high blood pressure, and other chronic conditions. Workers with diabetes may be covered by a group plan where they work, but they can get no other insurance if they leave.

This may tie workers to obnoxious working conditions for the rest of their working lives.

More often, a worker who leaves a plant that has a health plan finds it difficult to find another job with a comparable plan. Companies all over the country are dropping health plans as "too expensive.' Even more expensive are the private plans with even minimum coverage. No laid off worker can afford them. So he or she joins the 50 million Americans who can only pray that they don't get sick.

Another reason for the high cost of insurance is criminal collusion among the insurance companies. In 1945, the McCarran-Fergusen Act was passed exempting the insurance industry from anti-trust laws. It allowed insurers, in 1984, to ofter less coverage for more money, keep certain kinds of insurance off the market, and boycott insurance companies that did not participate in their cartel.

This resulted in the insurance crisis of the 1980s, when both cities and citizens were refused liability and other forms of insurance. A California deputy attorney general condemned the conspiracy as "a gross effort by the insurance companies to mug the American economy."

A suit has been filed against 32 companies, including prestigious Lloyds of London. However, it will be years, if ever, before the insurance conspiracy can be ended.

"Belly up"

The citizen who overcomes all obstacles and holds a health insurance policy still has little cause to relax. The insurance company may go belly. One of the biggest companies, Executive Life Insurance: recently collapsed after over-dosing on junk bonds. A shell-shocked audience of policy holders was warned not to expect full recovery of the money owed them.

"I think I will be lucky to get 10 percent," lamented one victim. A number of companies cut costs by transferring their group health insurance to Executive Life without letting their employees know. They wanted to save money with a cheapo outfit. Now they are trying to squirm our of responsibility for their employees' losses.

California regulators are telling victims to sue in court. But a sceptical policy hold. er asks, "Who is going to end up with all the money? The lawyers? The accoun tants?"

The possibility of federal mandates has led a number of states to consider healthcare schemes. Again the insurers are on the State House steps making sure they get in the act. They are offering "bare-bones" insurance policies that would just meet state requirements.

They argue that a little insurance is better than none. An "insured" worker in Kansas might not agree. Under that state's plan the employee pays the first $5000 ol his medical bill as well as monthly premiums.

Concern over the health crisis has been expressed in all political quarters except the White House. President Bush has no program. He has not even mentioned the topic in a major address. Secretary of Health Louis Sullivan says he is waiting for a "consensus." A consensus among the multi-nationals, he means. A White House spokesman said no program could be pur together before the end of this year.

Meanwhile, members of Congress are fielding a number of plans. Nearly all carry a fatal flaw. They call for buying more insurance. The plans differ in detail but all essentially continue the present system of health insurance for private profit.

The American Medical Association (AMA) would give employers tax incentives to buy health insurance. They would cut costs by limiting awards for malpractice injuries. Let the patient bear the burden!

The conservative Heritage Foundation would tax workers on their health insurance benefits, and mandate that all families buy basic insurance.

Need socialized medicine

The AFL-CIO has been remiss for nor organizing an aggressive campaign for national health. Labor leaders have been content to echo the bosses' call for more private insurance. It is said that the plan proposed by the United Auto Workers could have been written by Lee Iaccoca.

An adequate national health plan must bypass the insurance industry completely. It must be financed by taxes on the rich. and involve no co-payments by the patient. It must cover every citizen and resident from the cradle to the grave. No week-old babies, or homeless falling through the cracks.

Many healthcare plans embodying these principles are being formulated by unions and consumer groups. They have the principal merit of cutting out the profiteering insurance industry, and putting the patient first.

On the weaker side, health planners are inclined to limit their plan to "what the country can afford." This means limiting healthcare to the amount the ruling class is willing to spend. They look to Britain. where the National Health Service is starved of funds.

It would be better to look to Cuba, where an impoverished Third World coun try offers its people the most complete healthcare service at no cost to the patient. One reason for Cuba's success is that the new government gave education and healthcare the first priority in building the new society.

Their plan embraces all aspects of medical care, from training doctors and building hospitals and clinics, assuring medical supplies, to seeing that the remotest village has a clinic and transportation to a hospital.

The Cubans had to push aside their local and foreign exploiters before they could lay the foundations for "socialized medicine." We, in America, have an equally formidable obstacle.

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