Democrats’ health ‘reform’ bails out insurance and drug corporations

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In late March, after months of debate, Congress passed, and President Barack Obama signed into law, a bill that progressive columnist Chris Hedges accu­ rately described as “the health-care industry’s ver­ sion of the Wall Street bailout.”

Rose Ann DeMoro, head of National Nurses United, said the bill “fails to deliver on the promise of a sin­ gle standard of excellence in care for all and instead makes piecemeal adjustments to the current priva­ tized, for-profit health-care behemoth.” She added that boasts comparing the bill to Social Security and Medicare were “intended to mollify liberal support­ ers following repeated concessions to the health-care industry and conservative Democrats.”

Some of the failings in the bill cited by DeMoro, Hedges, and other advocates of a single-payer (“Medi­ care for All”) system were:

• A mandate forcing people without coverage to buy insurance. This is a gift to insurers worth at least $447 billion from government subsidies alone, not to mention the huge sums workers will have to dig out of their own pockets. Policies will cost up to 9.7% of workers’ incomes but cover an average of only 70% of medical expenses. Even if they can afford the pre­ miums, many will meet financial ruin—or be forced to forego care—because of high co-pays and deduct­ ibles.

• Premiums will continue to climb. Threats by the Obama administration to create a federal authority to look at insurer rate hikes were dropped. Similarly, limits on out-of-pocket payments are vaguely worded.

• No standard benefits package, meaning no guaran­ tee that patients will get the care needed; instead, a requirement that benefits should be “comparable to” current employer provided plans.

• The much-touted end of denial of claims is also shot through with loopholes, and is subject to review by state governments, many of which, said DeMoro, “have systems now in place that are dominated by the insurance industry.” And insurers may continue to drop coverage for “fraud or intentional misrepresen­ tation”—the main pretext now used.

• Permitting insurers to sell policies across state lines, exempting patient protections passed in more regulated states.

• Allowing insurers to charge three times more based on age and/or certain conditions, and to use marketing techniques to cherry-pick healthier, less costly enrollees. Big companies with a predominantly female workforce can be charged higher genderbased rates at least until 2017.

• Taxing employer-provided health benefits for the first time, starting with “Cadillac Plans,” i.e., those whose value exceeds $10,200 for individuals or $27,500 for families. With no real checks on premium hikes, many plans will rapidly reach that amount by the start date, 2018. Workers will have to switch to 6 SOCIALIST ACTION APRIL 2010 Anne Sherwood / Getty Images plans providing little medical and/or financial protec­ tion. And employers will rush to drop coverage com­ pletely.

• A windfall for Big Pharma. Obama blocked provi­ sions to give the government more power to negotiate drug prices and gave the name brand drug-makers 12 years of marketing monopoly.

• 23 million residents of the U.S. will remain without any insurance. Pointing to Massachusetts, whose leg­ islation was the model for the bill, Hedges noted that one in six people there say they cannot afford care, and tens of thousands have been evicted from the program because of budget cuts. “The 45,000 Ameri­ cans who die each year because they cannot afford coverage will not be saved” under the federal bill.

• The bill will cut about $40 billion from Medicare payments to safety-net hospitals, threatening care for tens of millions without insurance who depend on those hospitals.

Discrimination against women and immigrants National Organization for Women President Terry O’Neill called the bill a “highly flawed, diminished piece of legislation that continues reliance on a fail­ ing, profit-driven private insurance system.” Noting that the key to the deal was Obama’s knuckling un­ der to anti-choice fanatics, she said the bill “sends the outrageous message that it is acceptable to negotiate health-care reform on the backs of women.” The bill’s permission of age-rating, she noted, “has a dispropor­ tionate impact on women, whose incomes and sav­ ings are lower due to a lifetime of systematic wage discrimination.”

O’Neill also denounced the bill’s discrimination against immigrants. Legal residents will face a five-year waiting period before being eligible for Med­ icaid, and undocumented workers will not even be permitted to use their own money to buy insurance (even though they pay income taxes and Social Secu­ rity taxes that are used to fund others’ health care.)

These provisions aren’t about saving money, she said. “They are there because of ugly anti-immigrant sentiment, and must be eliminated.”

The turning point in securing the bill’s passage was a deal with anti-abortion Democrats, in which Obama signed an executive order reiterating the Hyde (Left) Demonstrators for genuine healthcare reform rubbed shoulders with ultra-right Tea Party people when Obama spoke in Belgrade, Mont., last August.

Widespread confusion over Obama’s health proposals ultimately benefited the corporations who profit from the new law.

Amendment’s ban on use of federal money for abortion. NOW also objected to Obama’s sup­ port for a “conscience clause” through which essential emergency services are denied. If a woman is raped, under this clause she could be denied emergency contraception that she might desperately need.

In a PBS interview with Bill Moyers, Dr. Mar­ cia Angell, editor emeritus of the New Eng­ land Journal of Medicine, said, “The bill actu­ ally expands and cements insurers’ position as the lynchpin of health care reform. … A lot of people say, ‘Let’s hold our nose and pass it, because it’s a step in the right direction.’ And I say, it’s a step in the wrong direction.” Medi­ care was being slashed, she said, to subsidize the private health insurance industry. This fi­ nancial shift explains the bill’s much-touted relief to the federal deficit.

Single-payer activists such as DeMoro, as well as Physicians for a National Health Pro­ gram and its state affiliates, noted some posi­ tive aspects of the bill:

• Increased funding for community health centers, nearly doubling their current patient volume.

• Reducing but not eliminating the “donut hole” gap in prescription drug coverage for which Medicare en­ rollees have to pay fully out of pocket.

• Insurance regulations covering members’ depen­ dent children until age 26, new restrictions on limits on annual and lifetime insurance coverage, and some limits to dropping children with pre-existing condi­ tions.

• Permission for individual states to waive some fed­ eral regulations to allow adoption of programs like an expanded Medicare. Some activist groups will use this clause to focus on achieving state-level single-payer programs.

• Expansion of Medicaid to cover 16 million addi­ tional low income people. But activists note that the program remains significantly under-funded, and so care providers often drop out for inadequate reim­ bursement. What’s more, the bill’s added federal sub­ sidies to states (which normally bear half of Medic­ aid’s costs) will expire in 2016.

In fact, the states, which are all facing budget crises in the current Great Recession, are already beginning to slash away at Medicaid and other health-care pro­ grams. So when all is said and done, the level of Med­ icaid-provided health care could be even less than it currently is.

States are finding they can’t find required matching funds, without which the Feds won’t contribute their share of Medicaid spending. This is at a time when the recession and high unemployment have driven Medicaid enrollment up dramatically—by 3.3 million people over the last year. When Recovery Act fund­ ing runs out at the end of 2010, states are expected to remove hundreds of thousands from Medicaid. Many governors’ proposed budgets for state fiscal year 2011 already include drastic cuts to Medicaid.

In any case, PNHP and other activists echoed De­ Moro when she said, regarding the bill’s positive fea­ tures: “All of these reforms could, and should, have been enacted on their own without the poison pills that accompanied them.” PNHP noted that even had the bill included a “public option,” it wouldn’t have mattered as “even a robust public option would have foregone 90% of the bureaucratic savings achievable under single payer.”New York Times columnist Paul Krugman quoted Newt Gingrich, former Republican speaker of the House, as saying, “They [Democrats] will have destroyed their party much as Lyndon John­ son shattered the Democratic Party for 40 years by passing civil rights legislation.” And Krugman cited “racial hate-mongering” in an op-ed in Investor’s Busi­ ness Daily, which declared that health reform is “af­ firmative action on steroids, deciding everything from who becomes a doctor to who gets treatment on the basis of skin color.”

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Yet liberals echoed Obama’s claims that the bill was the greatest thing since Social Secu­ rity or Medicare. And New York Times eco­ nomics columnist David Leonhardt claimed that the bill is the government’s “biggest at­ tack on economic inequality” in over three decades. “It is the centerpiece of [Obama’s] deliberate effort to end what historians have called the age of Reagan.”

But DeMoro quoted former Labor Secretary Robert Reich as saying, “don’t believe anyone who says Obama’s health-care legislation marks a swing of the pendulum back toward the Great Society and the New Deal....

“Obama’s health bill is a very conserva­ tive piece of legislation. Unlike Social Secu­ rity and Medicare, which expanded a public safety net, this bill requires people—in the midst of the mass unemployment and the worse economic downturn since the Great Depression—to pay thousands of dollars out of pocket to big private companies for a product that may or may not provide health coverage in return.

“The administration and its major support­ ers shut out advocates of more far-reaching reform, while vilifying critics on the left. … As more Americans recognize the bill does not resemble the distortions peddled by the right, and become disap­ pointed by their rising medical bills and ongoing fights with insurers for needed care, there will be new opportunity to press the case for real reform.”

The AFL-CIO, on the other hand, called the bill a “momentous step toward comprehensive health care,” “not a baby step or half measure,” and “an op­ portunity to change history.” This was despite AFL-CIO President Rich Trumka having been summoned to the White House for a last-minute meeting in which he was told that the deal he’d brokered on taxing health-care benefits was off. On Jan. 14, Trumka had announced that he had negotiated an improved for­ mula for determining the threshold at which the 40% excise tax on “Cadillac plans” would kick in. Obama told him that formula would be weakened.

The AFL-CIO claimed victory because the final bill exempts all plans until 2018, not just union-negoti­ ated plans. That at least stops labor from looking like it had protected only its own members and not the working class as a whole. But that will be cold comfort come 2018 for most workers, as health-care inflation puts millions more into the range of the excise tax. No change “from within the Democratic Party”

Of the dozens of sponsors of the main single-payer bill, HR676, only two voted against the Obama plan during its first passage in the House a few months ago. The final hold-out, Dennis Kucinich, who had sworn to oppose the legislation unless there was a public option, switched sides after Obama twisted his arm. Such capitulations by mass organizations and so-called “friends” in office allowed the media to present obstructionist Republicans, and cheerleading racist and homophobic scum, as the only opposition to the Obama plan swindle.

Hedges, citing mammoth contributions to the Dem­ ocrats by insurers and drug makers, said the bill “is another example of why change will never come from within the Democratic Party. The party is owned and managed by corporations. … Change will come only by building movements that stand in fierce and un­ compromising opposition to the Democrats and the Republicans. If they can herd Kucinich and John Cony­ ers [676’s author] …onto the House floor to vote for this corporate theft, what is the point in pretending there is any room left for us in the party?”

Meanwhile, Republicans, both elected officials and Astroturf activists, fought against the bill with a ven­ om that would make you think they were holding the fort against socialized medicine. The day of the bill’s passage in the House, members of the embryonic fas­ cist Tea Party movement lined up to yell racial epi­ thets at Rep. John Lewis and others, and to shout ho­ mophobic insults at Rep. Barney Frank. In the days af­ ter the bill passed, 10 Democratic legislators got fed­ eral law enforcement protection after receiving death threats and having their homes or offices vandalized.

Many media pundits noted the irony in free-market Republicans so viciously opposing a bill that grants hundreds of billions to private corporations. Jon Flan­ ders, a member of the Troy Area Labor Council and a leader in New York single-payer efforts, explained clearly the sinister shell game behind this supposed irony: “Here is where the true beauty of the two-par­ ty capitalist political system kicks in. The problem of spiraling health care costs must be solved within the framework of capitalism, without damaging the ma­ terial interests of the major corporations in the field… “The working class must be forced to pick up an in­ creasing portion of the costs of health care. There is always the possibility that this might stimulate a ple­ beian revolt. … So in the face of that threat of unpleas­ antness, the two parties have a division of labor. … To the Democrats falls the task of passing the corporate bailout ‘Republican’ bill. ... Their problem is how to sell this to their base, with the growing anger against for-profit health insurers complicating matters.

“There is a lot of smoke and mirrors about a public option to divert the masses right up to a vote. But this ploy must be abandoned in the end. The whole en­ terprise could sink at this stage of the game. This is where the Republicans come in, teabags waving aloft. Pounding the podium in faux-hysteria, they posture as the saviors of the free market, implacable enemies of totalitarian government, the only ones standing in a thin red line against the advance of socialism.

“The Republican tirades work their magic both on their own base and on the base of the Democratic Party. The teabaggers get energized, mobilizing in protest, raising visions of brown-shirted hordes in the minds of the Democratic base. ‘My God, we have to beat these fascists,’ becomes the mantra. Which is exactly the political cover that the leaders of the Democrats need to bring home the bacon, and pass the bailout bill. Which they do, with much congratula­ tion all around by most of the liberals so insistent on a public option only weeks earlier.

“So both parties have strutted on the stage to the sat­ isfaction of their supporters, to all appearances doing what they were elected to do. And the health insur­ ... Antiwar rallies (continued from page 3: “Repression continues in Honduras”)

War.” With the election of Democrat Barack Obama, UFPJ’s leaders saw its mission as being in conflict with its orientation to Democratic Party “lesser evilism.” It could not bring itself to mobilize in the nation’s capi­ tal against the wars now taken on by Obama and his equally imperialist cohorts. UFPJ remains as a diffuse network focused on opposition to nuclear weapons.

The same could be said for several other forma­ tions that have yet to understand the dire necessity of constructing a united and independent antiwar move­ ment—that is, a movement that fights all the wars, occupations, and interventions of imperial America.

There is little doubt that there are other factors that have qualitatively reduced the size and breath of the present antiwar movement. The massive attacks on working people arising out of the capitalist economic crisis have had a demoralizing effect on the antiwar and most all other social movements. There is mass opposition to U.S. wars but not yet mass protests on the order of the hundreds of thousands that mobilized in 2001-2005.

Similarly, there is mass opposition to the attacks on the labor movement and working people more gener­ Doug Mills / NY Times (Left) Obama signs the Health Care Act on March 23, surrounded by Democratic congressional supporters.

Rance bailout is accomplished. As a piece of stagecraft, it’s a thing of beauty....”

As soon as the bill passed, employers began taking massive charge-offs against future earnings, claiming huge antici­ pated losses from elimination of tax sub­ sidies for some retirees’ drug coverage. AT&T’s $1 billion charge is the biggest so far. Yet these companies will actually come out way ahead, said White House senior adviser Valerie Jarrett: “What they’re going to have to write off is noth­ ing compared to the enormous financial benefits to those very same companies by health insurance reform that will bring down their costs substantially.”

And she told no lie when she said of the bill: “On balance, business will come out way ahead, and that was one of the presi­ dent’s objectives.”

The Labor Campaign for Single-Payer said that comparisons of the bill to Social Security “might be true had President Roosevelt turned over the Social Security Adminis­ tration to Goldman Sachs,” and that comparisons to Medicare “also might be true had President Johnson deliberately designed a plan that excluded millions of senior citizens from coverage.”

The Campaign said that at its National Meeting in early March, “we came to the conclusion that, in the end, the debate between those who maintain that the current legislation is ‘better than nothing’ versus those who believe it will ‘make things worse’ will lead us nowhere. What is important now is to make sure that this incredible movement that has arisen to fight for the right to health care for all in America contin­ ues beyond this moment… “We’ve already won the battle of ideas. During the two-year debate preceding this week’s votes, singlepayer Medicare-for-All emerged as the gold standard against which all other reforms were measured. There is no longer any credible dispute over the fact that Medicare-for-All is the most cost-effective and just way to provide quality health care for all in America.”

All of this bodes well, said the Campaign, for in­ creased education and mobilization as the mate­ rial impact of the bill’s main features kicks in: “The health-care system that will emerge from this legis­ lation is unstable and financially unsustainable. It is headed for crisis, perhaps even before it is fully im­ plemented in 2017. We will explore the impact of the new legislation on collective bargaining and will act in solidarity with workers everywhere who stand up and fight for health care.”

The Campaign, and all other single-payer activists, are hitting the ground running even before the bill’s impact hits home, and are starting now to rebuild the single-payer movement on an even bigger basis. In that process, the exposure of even the most liberal Democrats during this debate as false friends—com­ bined with that party’s attacks on workers over immi­ gration, war, discrimination, and jobs—will hopefully revive sentiment for independent labor political ac­ tion, without which real health-care reform is impos­ sible. n ally; there is mass opposition to the proven climate crisis threats to the environment, to the horrors that immigrant workers are subjected to, to the attacks on women’s right to choose, to the rising racist and scape­ goating sentiments generated from within both estab­ lished capitalist parties.

In 16 short months, the Obama administration has registered a string of broken promises and implement­ ed reactionary policies on numerous critical social and political issues. It has bailed out the corporate elite and its banks, insurance companies, and corporations to a degree unprecedented in U.S. history. And it has taken these trillions out of the pockets of working people as never before. It has mortgaged the nation’s future in a mass of unpayable debt, running its printing presses full speed to spew out trillions in Treasury bonds and cash to pay for endless wars and interventions at the expense of the vast majority.

It is only a matter of time until the gap dissolves be­ tween the mass opposition to these policies and a con­ certed fightback, resolving the contradictions of the present moment. The ability of the broad antiwar and other critical social forces that have the experience and will to unite the millions in massive actions to stop all U.S. wars and end the attacks on all working people will prove critical in the months and years ahead. The July 23-25 United National Antiwar Conference in Al­ bany, N.Y., will be a good place to begin. n SOCIALIST ACTION APRIL 2010 7

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Among other issues, Lopez stressed the need to address the root causes of migration, including trade agree­ ments like NAFTA that have displaced thousands of workers and caused mass waves of migration across the U.S.-Mexico border. “If we don’t address the immigration issue honestly, 20 years in the future we will be in the Other speakers at the GIJN press conference included David Silva Villalobos, president of the Executive Board of the Peoples Legal Defense Committee of California, INC.; Isabel Garcia, co-chair of the Coalición de Derechos Humanos in Arizona; Carlos Arango, executive director of Casa Aztlan in Chicago; noted labor and immigration journalist David Bacon; student activist Daniela OrtizBahamonde of Stop the Raids, Students of Trinity Col­ lege; and Juan Jose Bocanegra, an immigrant rights ac­ tivist in Seattle. Members of the GIJN called for a clear and easy path to legalization that addresses the huge backlogs of applicants, demanded an end to raids and deportations, border militarization and the criminaliza­ tion of workers, and denounced the use of guest worker programs. To find out more about the Grassroots Immi­ grant Justice Network, to listen to their press conference, or to sign their Open Letter on immigration reform, visit wwwgrassrootsimmigrantjusticenetworkblogspot.com.

strations in U.S. history, led by immigrants. Immigrant communities across the country protested against the reactionary Sensenbrenner legislation and demanded a new approach to immigration—one based on human rights and labor mobility. They demanded an end to the raids and deportations that were terrorizing their com­ munities. The U.S. sat up and listened to what they had substance, pumping up the crowd but avoiding any real discussion of the issues that many Latino and other im­ migrant communities face daily. Leaders of grassroots ering of the immigrant community. The immigrants and community groups have commented that many Latinos their allies who filled the National Mall made it very clear don’t actually know what the Gutierrez immigration that they will no longer stand for the use of programs and I-9 audits, or “silent raids,” have already been used proposal contains or how it would really affect them in like E-verify and 287(g) to threaten their communities to fire thousands of workers and break unions in places and put their jobs and their families in jeopardy. They came out in force to hold President Obama accountable The article in the Washington Post also states that the grant Justice Network (GIJN), is attempting to address for his promises, surpassing even the expectations of Schumer-Graham immigration reform proposal would that very problem. At a press conference last week, the the organizers of the rally. Once again, immigrants have require all U.S. citizens and legal immigrants to carry GIJN asked for a broader community dialogue on im­ biometric ID cards. These high-tech Social Security migration reform. “Our principal goal is to generate a Now more than ever is the time for all workers to join cards would hold DNA information on all U.S. citizens national dialogue based on an alternative framework forces and take up the banner for immigrant rights. This and residents. Increased security measures like these which views immigration as an issue of labor mobility time around, it will take another massive concerted ef­ erode the basic freedoms of everyone living in the U.S. and human rights in an era of economic globalization,” fort for immigrants to open a new dialogue on immigra­ and increase the general climate of fear in a post-9/11 stated Isabel Garcia of the GIJN in a recent press release. tion reform, pushing forward legislation that will truly “If you want to deal with the issues surrounding the relieve the suffering of immigrant families and that will Speakers at the March 21 rally included Rep. Nydia mass migration of people anywhere in the world, you grant an unconditional amnesty for all while address­ M. Velazquez (D-N.Y.), the leader of the Congressional ing the underlying causes of migration. Only by joining Hispanic Caucus, Rep. Luis Gutierrez, Roman Catholic In a press conference on March 17, Nativo Lopez, a hands and joining our struggles can we overcome the Cardinal Roger M. Mahoney of Los Angeles, and the Rev. member of the GIJN and the National Director of the fear and hatred that has plagued our nation for too long. Jesse Jackson. While most speakers urged the need for Hermandad Mexicana Latinoamericana, laid out a new a comprehensive immigration reform, they said little of set of principles for the immigrant rights movement. migrant-rights rallies are planned nationwide! n ... Immigrants (continued from page 1: “200,000 flood Washington, DC, to demand immigrants’ rights”)

like Los Angeles and Minneapolis. world. their daily lives. must address the root causes, it’s that simple.”

Justin Wilson / Getty Images One group that was at the rally, the Grassroots Immi­ Guatam Singh (Left) March 24 rally for immigrants’ rights outside Sen. Diane Feinstein’s office in San Francisco. same place we are now,” said Lopez.

In 2006, we witnessed one of the largest mass demon­ to say, and the Sensenbrenner bill was defeated.

On March 21, we once again saw a historic mass gath­ stood up for their livelihoods and their rights.

All out for May 1, International Workers’ Day, when im­

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The bill ‘sends the outrageous message that it is acceptable to negotiate health-care reform on the backs of women.’ — NOW Pres. Terry O’Neill

‘The administration and its major supporters shut out advocates of more far reaching reform, while vilifying critics on the left.’ — Former Labor Sec. Robt. Reich