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Private Health Insurance Wastes $350 billion Every Year

It’s no longer news that at least 47 million Americans lack health insurance, and another 50 million are “under-insured” (meaning whatever ails you is excluded). But we seldom hear that private health insurance wastes $350 billion every year, enough to pay for high quality comprehensive health care for everyone. Nearly one-third of our health care costs are eaten up by overhead: marketing, billing, profits, denying coverage, hassling patients and doctors. While 30 cents of every dollar of health costs pays for overhead, Medicare costs 3 cents on the dollar. Today, rising health care costs cause one-half of all personal bankruptcies, three-fourths of whom have insurance.

Politicians promise us “universal health care,” a phrase now devoid of meaning. The government would help us buy private insurance, especially through employers. As the economy hemorrhages more than 200,000 jobs every month, and insurance costs soar, with employers large and small, including state and local governments, unable to afford to insure their employees, an employer-based system has become a non-starter. In fact, relieving the auto and steel industries of the burden of providing health insurance for their employees and retirees would make those vital industries more competitive with industries around the world whose governments have assumed health care costs. Besides, Americans want free choice of a doctor, rather than a free choice of an insurance company, each of whom offers a confusing array of benefits, deductibles, co-pays, annual and lifetime caps.

A single-payer system simply means government-financed, privately delivered health care: no deductibles, no-co-pay. H.R. 676, the Expanded and Improved Medicare for All Act, sponsored by Rep. John Conyers (D-MI) and more than 90 fellow Representatives in the 110th Congress is the answer. It provides for doctor, dentist, prescription drugs, mental health, nursing home and home health care, eyeglasses and hearing aids. ADA and a broad coalition of groups representing doctors, nurses, medical students, labor unions, grass-roots citizen and faith-based advocates support H.R. 676.

Under H.R. 676, everybody would have a card to present to a health care provider. No more hassle or cost. Doctors can already bill Medicare electronically. That would be their only “paperwork.”

There are other benefits for patients. The government would negotiate prices of prescription drugs. Electronic records would foster continuity of care and reduce medical errors. Complete data would be available so a professional board could determine best practices: what treatments work and which don’t. Doctors would emphasize prevention. Hospitals would be paid based on a global budget negotiated to cover their costs, rather than current practice of billing for each aspirin and each test.

We know the powerful $500 billion-a-year insurance industry and the super-rich pharmaceutical industry -- reluctant to lose their bonanza -- will barrage the airwaves with ads to scare and confuse the public. They’ll argue that people will run to the doctor unnecessarily, that patients’ bad practices are causing soaring costs. The data shows otherwise. Rising costs are attributable to overuse of emergency rooms by people who have no family doctor or available clinic, by doctors over-ordering expensive technology, and by unnecessary surgery performed by for-profit hospitals. In fact, Medigap policies purchased to cover unaffordable co-pays and deductibles are another insurance industry cash cow. Not to be forgotten, an insurance company’s fiduciary responsibility is to its stockholders, not to patients. Insurance companies are the problem, not the solution.

In 2003 Barack Obama said a single-payer system was a good idea, but he feared it was not politically feasible. ADA members worked tirelessly for his election this November, and we agree with him that health care is a human right. We believe that the American people will convince politicians that a single-payer system is politically feasible and an economic and moral imperative. With soaring personal bankruptcies and unemployment, state governments forced to cut back on our tattered safety net, the question is not whether we can afford to enact single-payer health care, it is whether we can afford not to.
 

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