Bitter Medicine: Health Care Reform Groups Fear The Cure May Be Worse Than The Disease

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Illustration by Danny Hellman

The Democratic Party has been promising a major overhaul of the health care system for a generation or more. Now, with President Barack Obama and his party’s congressional leaders in a strong position to finally reach that elusive goal by next month, this should be a momentous time for the reform movement.

So why are so many health reform advocacy groups unhappy?

The answer involves policy and process. Rather than pushing for the single-payer system that many progressive groups demand and say is needed, Democratic leaders immediately opted for a compromise plan they hoped would be acceptable to economic conservatives and the insurance industry.

But Republicans are still calling them socialists for doing it, while the insurance industry — which loves the portion of the legislation that requires everyone to buy coverage — is still spending $1.4 million a day to either kill the complicated bills or turn them to its advantage.

When congressional Democrats unveiled America’s Affordable Health Choices Act (HR 3200) on July 14, many reformists thought a long-awaited, dramatic overhaul to a broken system was close at hand. The insurance companies would finally be made to adhere to ethical practices, and the Democrats would defend their plan to establish a government-run health insurance option that could compete with private insurers and keep them in check.

"American families cannot afford for Washington to say no once again to comprehensive health care reform," said Rep. George Miller (D-Martinez), who chairs the crucial House Education and Labor Committee.

The Democrats’ bill does address some critical flaws in the health care system. It would greatly expand Medicare to ensure coverage for low-income individuals, and would subsidize coverage for those earning up to 400 percent of the federal poverty level, defined as $43,320 for an individual and $88,200 for a family of four. The bill would forbid insurance companies from denying coverage to patients based on a preexisting condition, age, race, or gender. It would eliminate co-pays for preventative care and establish a cap on annual out-of-pocket expenses. To pay for it, the proposal would create a graduated tax on households earning more than $350,000 a year, with the top bracket being a 5.4 percent levy on incomes of more than $1 million.

Progressive members of Congress threw their support behind the bill because — and only because — it included the public option. "The public option is central to our support of health care reform," read a statement from the Congressional Progressive Caucus.

Rep. Lynn Woolsey (D-Petaluma), who chairs the CPC, was quoted in the Huffington Post as saying, "We have already compromised. More than 90 percent of the progressive caucus would vote today for a single-payer system. And so for us to compromise and get behind a really good strong public plan, I mean that’s as far as we’re going."

While that statement indicates the precarious nature of the current legislation — which will likely be weakened further as it works its way through the process and merges with legislation from the more conservative U.S. Senate — many progressive groups aren’t even willing to go that far.


Many single-payer supporters say some reform is better than none, and that the passage of HR 3200 would represent a major win. "We can advance many of the principles that we support with the House bill," said Anthony Wright, executive director of Health Access California and an organizer for the national reform advocacy group Health Care for America Now. The nation, he believes, needs to endorse principles such as universally covering Americans and making sure patients aren’t left alone "at the mercy of the private insurance industry."

Yet other groups fear this cure would be worse than the disease, sending millions of new customers into a private insurance system that simply doesn’t work, and compounding existing problems.

"We’re still pushing for a national single-payer bill," Dr. James Floyd, a health reform researcher with the nonprofit group Public Citizen, told the Guardian. "While we’re open to other options, we haven’t seen anything [in proposals by Democratic congressional leaders] yet that is acceptable."

That position has plenty of support among the general public and reform-minded organizations, for whom single-payer continues to be the holy grail.

The current proposal "doesn’t change the system one bit," said Leonard Rodberg, a member of Physicians for a National Health Program, who works in health policy. "These bills are requiring that people buy insurance, but there are no numbers about how much the insurance would cost. And if the cost of the insurance is still too high, you can remain uninsured."

And as negotiations center on the government-run insurance option, the concept of scratching the status quo and offering free Medicare-like health care to every American instead has fallen to the wayside.

Rep. John Conyers (D-Mich.) got 84 co-sponsors for his single-payer bill, HR 676, and hearings were held in June to explore the option. But congressional leaders then took it off the table. The reasons why seem to be as much about political will as they are about campaign contributions from the insurance industry. As one high-level congressional staffer told us, many lawmakers won’t back a single-payer system in part because they "don’t want to have to respond to being accused of being a socialist by the right wing."

Then there’s the insurance lobby. "They spend hundreds of millions," the staffer said. "They lobby Congress, and they provide millions to campaigns. They have Fox News. But the single-payer movement is growing leaps and bounds."

Rodberg said the insurance industry would love to see a mandate to buy insurance approved at a time when insurers are losing customers because the economy is shedding thousands of jobs each month. "This is a bailout for the insurance companies," Rodberg told us. "But there’s absolutely nothing in this legislation that will control costs, because it just leaves it to the insurance companies and the market."

Dr. Jim G. Kahn, president of the California Physicians’ Alliance and a professor at UCSF with expertise in health policy, told us he believes the proposed bill falls short of the goal of comprehensive, universal coverage. "’Universal’ was recently redefined by [Montana Sen. Max] Baucus as 95 percent — i.e., 15 million uninsured," Kahn told us via e-mail. "Reaching even that level will be hard, due to the complexity of enforcing an ‘individual mandate’ on families with only modest income (and hence no subsidies). And in eagerness to reach that level, more and more people will become underinsured, with inadequate coverage and a further boost in already high medical bankruptcy."

Medical debt contributed to nearly two-thirds of all bankruptcies in 2007, according to a study in the American Journal of Medicine. The majority of those afflicted were solidly middle-class homeowners at the start of their illness, and most had private health insurance.

Health Care Now, a hub for single-payer grassroots groups, is planning a large rally in Washington, D.C., for July 30, the anniversary of the founding of Medicare, on which many single-payer plans would be based. "Single-payer is the only plan that would truly be universal and contain costs," said Katie Robbins of Health Care Now, arguing that the current plan pushed by congressional leaders "doesn’t protect us from the ills of the insurance-based system as we know it."

Other progressive groups are withholding judgment for now, hoping the good aspects will ultimately outweigh the bad. "We’re digging through them now. We support a bill that has a true public option, and the House bill has that," said Consumer Watchdog’s Jerry Flanagan. "But we really dislike the individual mandate [to purchase health insurance]. The insurance companies really don’t want the public option, but they really want the mandate."


Even if single-payer isn’t going to be the national model yet, advocates say it’s crucial that states such as California be allowed to experiment with the option anyway. Single-payer advocates in Congress have insisted the health care legislation be amended to explicitly allow states to do single-payer (otherwise, federal preemption laws and the Employee Retirement Income Security Act might prevent states from doing so).

On July 17, Rep. Dennis Kucinich (D-Ohio) successfully inserted such an amendment into the bill that cleared the House Committee on Education and Labor with a 25-19 vote, which included significant Republican support. The amendment was opposed by Miller, indicating Democratic Party leaders oppose the change and may ultimately succeed in stripping it from the bill.

"George Miller is a longtime supporter of a national single-payer plan and health care reform. The truth is, however, there are not enough votes in the House or the Senate to pass a final bill that contains single-payer language. That is unfortunate but it is also the truth," Miller spokesperson Rachel Racusen told the Guardian.

California is a hotbed of single-payer activism. Even a leading candidate for state insurance commissioner, Assemblymember Dave Jones (D-Sacramento) — who appeared on the steps of San Francisco City Hall on July 15 to receive the endorsements of a long list of local elected officials — has made single-payer advocacy a central plank in his campaign.

The movement is so strong in California that it actually had legislators vying for who would get to carry its banner. San Francisco’s own state senator Mark Leno, a longtime single-payer supporter, was selected this year to take over the landmark single-payer legislation previously sponsored by termed-out legislator Sheila Kuehl, which has passed twice, only to be vetoed by Gov. Arnold Schwarzenegger.

"The more I dive into this issue, the more convinced I am that the answer has to be single-payer," Leno told us. "The only reform that truly contains costs is single-payer."

Leno doesn’t fault Obama for taking a more cautious stance — but he does believe the federal government shouldn’t block states like California from creating single-payer systems. "States should be incubators of trying different proposals. We have a great history with that," Leno said.

But even with a Democratic governor, there’s no guarantee that single-payer would be approved. Mayor Gavin Newsom is running for governor, featuring health care reform in his platform. He chairs the U.S. Conference of Mayors National Health Care Reform Task Force, which is pushing for approval of the Obama plan. But even Newsom won’t promise to back the Leno plan.

"He doesn’t think single-payer is the best option now," Newsom’s campaign manager Eric Jaye told us when asked whether Newsom would sign the legislation as governor. "He hopes and believes that as governor he will be supporting a national public option."

But in the end, the governor may not matter. Leno said the political reality in California is that voters, rather than legislators, will need to approve the single-payer system. The funding mechanism for any ambitious health care plan would require a two-thirds vote in the legislature, a political impossibility.

"The difference in California is the voters will have the final say. And I’m excited about that. The voters of California will be able to say to the insurance companies, ‘We’ve had enough, now go away,’" Leno told us. He said he expects a ballot campaign in 2012.

Of course, it won’t be that simple. Leno knows that the insurance industry will spend untold millions of dollars to defend itself and a "status quo that is only working for them, not for anyone else. This is an enormously powerful industry and they control the debates."

"Our effort here in California is an educational one. We have from now until the election in 2012 to make the arguments," Leno said.


Testifying at a hearing of the House Education and Labor Committee in June, Geri Jenkins, a registered nurse and the co-president of the California Nurses Association, related the story of Nataline Sarkisyan. The 17-year-old girl needed a life-saving liver transplant, Jenkins explained to Congress members. "But CIGNA would not approve it," she told them, "until I, and hundreds of others, protested. During one of the protests, I was with Hilda, Nataline’s mother, when she got the call of approval."

Hilda’s relief didn’t last long. By the time the hurdle had been cleared, Jenkins testified, "it was too late. Nataline died an hour later."

Nataline’s story sparked national outrage, and it has since become a flagship tale highlighting all that is wrong with this country’s health care system. But as the debate about health care reform continues inside House and Senate committee chambers, discussion about "universal health care" — a phrase with a simple ring to it — has grown murkier.

"We have a universal health care system now," Flanagan said, referring to how all Americans with serious medical conditions have a right to treatment — even if that treatment comes with great expense in an overcrowded public hospital emergency room. "It’s just the most inefficient system imaginable."

With the August congressional recess coming up fast and Obama leaning on Capitol Hill to shift into high gear on an issue that was a hallmark of his campaign, the pressure is on to vote on the historic health care reform legislation within weeks.

The Senate Health, Education, Labor, and Pensions Committee passed a health care reform bill July 16 that is similar to the House bill, with the vote split along party lines. Now, national attention has turned to the Senate Finance Committee, chaired by Baucus, which continued its efforts last week to achieve a bipartisan bill.

Many of progressive reform advocates simply don’t trust the players in Washington, D.C., to get this right, particularly Baucus. "He’s the voice of the insurance companies in the Senate," Flanagan said.

A recent article in the Washington Post estimated that the insurance industry is spending an estimated $1.4 million per day to influence the outcome of the health care legislation, and pointed out that many of the lobbyists were Washington insiders who had previously worked for key legislators, such as Baucus.

The Center for Responsive Politics, a nonpartisan nonprofit research group that tracks money in U.S. politics and operates the Web site, launched an intensive study of health care sector lobbyist spending, including cataloguing industry contributions to individual candidates from 1989 to the present. Baucus received more industry campaign contributions in that time than any other Democrat, the CRP study reveals, with a total of $3.8 million. Henry Waxman (D-Los Angeles), who chairs the House Energy and Commerce Committee, received a total of $1.4 million in that same time, while Speaker Nancy Pelosi (D-San Francisco) received $1.2 million.

Starting in the 2008 election cycle, the health sector gave more to Democrats than to Republicans, according to the CRP’s analysis.

To overcome that kind of money and influence, advocates say it was crucial to wield a credible single-payer option — a sort of death penalty for the insurance industry — for as long as possible.

"Having single-payer discussions on the table really informs the debate over the public option," Flanagan said. "But by removing single-payer, it made the public option the left flank."

Flanagan, like many, is worried about how a 900-page bill will turn out. "There are a thousands ways to get it wrong," he said. "An easy way to get it right would be to just do a single-payer system."


• Uninsured Americans: 47 million

• Uninsured Californians: More than 6.7 million (about one in six)

• African Americans without health insurance in California: 19 percent

• Latinos without health insurance in California: 31 percent

• Whites without health insurance in California: 12 percent

• San Franciscans without health insurance: 15.3 percent

• Rise in health-insurance premiums from 2000 to 2007 in California: 96 percent

• Projected rise in health care costs per family without reform: $1,800 per year

• Percentage of bankruptcies attributed to an individual’s inability to pay medical bills: 62 percent

• Percentage of Americans who skip doctor visits because of the cost: 25 percent

• U.S. rank of 19 industrialized nations on preventable deaths due to treatable conditions: 19

• Jobs that would be created by extending Medicare to all Americans: 2.6 million

• Annual U.S. spending on billing and insurance-related administrative costs for health care: $400 billion

Sources: Health Care for America Now, American Journal of Medicine, Physicians for a National Health Program

Consumer Watchdog
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