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The Meaning of
Obama's Healthcare Reform
and Next Steps (http://www2.socialistorganizer.org/index.php?option=com_content&task=view&id=377&Itemid=1)
Statement by the Editorial Board
of The Organizer Newspaper
THE ORGANIZER P.O. Box 40009 San Francisco, CA 94140
Tel. 415-641-8616 Email: theorganizer(AT)earthlink.net (
[email protected])
The healthcare reform bill adopted by the House of
Representatives on March 21 and signed into law by
President Obama on March 23 has been hailed widely as
an historic victory for working people. Some have gone
so far as to compare it to the adoption of the Social
Security and Medicare bills years ago. Even those who
criticize aspects of the bill argue that it marks a
step forward that warrants our support.
No one could be opposed to a healthcare reform bill,
however incremental, if it represented even a small
step in the right direction. But is this really the
case?
* Will 32 Million People Get Access to Healthcare?
The main claim put forward by the proponents of the
Obama healthcare bill is that 32 million people in the
United States will finally have access to healthcare.
This fact alone is historic, we are told. Putting aside
the fact that 15 million of the current 47 million
Americans without healthcare insurance will not be
covered under this bill, the expansion of healthcare
coverage to these 32 million people will not take
effect until 2014. This means that, based on current
patterns, an estimated 100,000 people will be left to
die between now and 2014 for lack of healthcare, while
millions more are driven into dire poverty or
desperation in their quest to fund their medical needs
-- all this at a time when unemployment has reached
Depression-era levels.
True, the bill's proponents say, but 32 million people
-- even with this built-in delay -- is huge. It would
be huge if these 32 million were actually to receive
healthcare. But this is not the case. As Rose Ann
DeMoro, executive director of National Nurses United
and member of the Executive Council of the AFL-CIO,
stated, this is an "insurance bill" -- not a
"healthcare reform bill."
Low-income people will get government subsidies to
purchase healthcare insurance from private companies,
while middle-income people will be pressured to buy
commercial health insurance policies, or else face a
stiff penalty on their taxes. But this does not mean
that these erstwhile 32 million uninsured people will
actually get access to healthcare. These are two
separate questions.
Families who cannot pay the high premiums, deductibles
and co-payments charged by the private insurance
companies -- estimated to be between 15% and 18% of
most family incomes -- will have no choice but to
default, thus returning to the ranks of the uninsured.
Millions of middle-income people will have to fork over
an estimated 9.5% of their income to pay for healthcare
coverage, but, according to the Physicians for a
National Health Program (PNHP), this insurance will
cover an average of only 70% of their medical expenses.
"This will leave them vulnerable to financial ruin if
they become seriously ill," notes the March 23 PNHP
statement. "Many will find such policies too expenses
to afford, or, if they do buy them, too expensive to
use because of the high co-pays and deductibles."
Firedoglake.com -- a website that has done a careful
study of the Obama healthcare bill -- points out the
following:
"The bill will impose a financial hardship on
middle-class Americans who will be forced to buy a
product that they can't afford to use. A family of four
making $66,370, for example, will be forced to pay
$5,243 per year for insurance. In addition they will
have to pay $5,882 in annual out-of-pocket medical
expenses."
The Obama healthcare plan is modeled closely on the
Massachusetts plan. It is worth looking at the
Massachusetts model to understand what we can expect to
get nationwide. A 2009 study by the state of
Massachusetts found that 21% of residents forgo medical
treatment because they can't afford it. They have
health insurance, but they can't afford to use it.
* Will the Obama Bill Contain Healthcare Costs?
This may have been true in Massachusetts, the Obama
healthcare proponents reply, but under the Obama bill,
healthcare costs will be contained. They argue that the
Obama bill will stop insurance companies from hiking
rates 30% to 40% per year.
This is another myth.
The Obama bill explicitly allows insurance companies to
unilaterally raise prices without ceilings or caps --
as well as to monopolize local markets to shut out
competitors.
Dr. Marcia Angell, editor emeritus of the prestigious
New England Journal of Medicine, told the Bill Moyers
Journal (PBS, March 5) that, "the commercial insurance
industry will be able to charge whatever they like."
Asked by Moyers about the cost-regulation measures
vaunted by the Obama plan proponents, Dr. Angell
replied, "If these companies are regulated in some way
that cuts into their profits, all they have to do is
just raise their premiums. And they'll do that."
But even these regulations will have little to no
effect. A main problem with the Obama bill is lack of
enforcement. Also, the private insurance companies
fought for, and secured, language in the Obama bill
that continues to exempt them from anti-trust laws and
leaves them free to raise rates without fear of
competition.
Healthcare reform advocates had campaigned strongly for
a "public option" that would enable people to purchase
health insurance directly from the government. They
argued that this would be a way to genuinely contain
healthcare costs, as it would provide real competition
to the insurance companies.
The insurance companies -- echoed by the Republicans
and many "Blue Dog" Democrats -- cried bloody murder.
This was an anti-American and anti-free market
proposal, they said. Tea Party activists took to the
streets to protest this "Hitler-inspired totalitarian"
provision. Clearly the insurance companies feared that
the public option, which would not be driven by the
profit motive and could therefore keep costs down,
would become so popular and would grow so much that
eventually they would be iced out of the healthcare
equation. And had the public option been included in
the plan, these companies could have been driven out of
business.
But as early as last summer, President Obama had made a
back-room deal with the for-profit hospital industry
that the public option would not be part of any final
bill voted by the Congress. This scandalous fact was
revealed by New York Times Washington reporter David
Kirkpatrick on the March 15 Ed Shultz MSNBC TV show,
and has not been denied by the White House. [See
accompanying article in Unity and Independence.]
So, while labor was pounding the pavement for the
public option last fall, Obama had already made a deal
that there would be no public option in the final
health reform legislation. And this is exactly what
happened: There was no public option. Obama betrayed
his promise to the labor movement, but kept his promise
to the private insurance companies that fund both the
Democratic and Republican parties.
* Will the Bill Stop Coverage Denials for Pre-Existing
Conditions?
What about the claim by proponents of the Obama bill
that it will stop the health insurance industry from
denying coverage to patients with pre-existing
conditions?
The Physicians for a National Health Program March 23
statement explains that "the much-vaunted insurance
regulation of ending denials on the basis of
pre-existing conditions is riddled with loopholes,
thanks to the central role that insurers played in
crafting the legislation."
One such loophole is this: The bill does not prohibit
the private insurance companies from dropping people in
individual plans when they get sick. If people with
pre-existing conditions manage to get health insurance,
they can always be dropped later.
Again, the main problem is lack of enforcement: The
bill does not empower a regulatory body to keep people
from being dropped when they're sick. There are already
many states that have laws on the books prohibiting
people from being dropped when they're sick, but
without an enforcement mechanism, there is little to
hold the insurance companies in check.
This brings up a number of other fundamental problems
with the Obama healthcare bill.
Subsidies Through Medicare Cuts and Excise Taxes
Under the bill, insurance companies will be handed
close to $500 billion in taxpayer money "to subsidize
the purchase of their shoddy products," as the PNHP
statement puts it. "Not only will this enhance their
financial and political power, and with it their
ability to block future reform," the PNHP text
continues, "but the bill will drain about $40 billion
from Medicare payments to safety-net hospitals,
threatening the care of the tens of millions who will
remain uninsured."
Another totally unacceptable way that the government
subsidies for the uninsured will be paid for is by
taxing many, if not most, of the employer-based
healthcare plans, that is, the so-called "cadillac"
union plans. This provision pits low-wage workers
against the unionized workforce, sowing tensions and
divisions in the working class.
International Association of Machinists and Aerospace
Workers (http://www.goiam.org/) (IAM) President Tom Buffenbarger explained his
union's opposition to this measure:
"The IAM opposes the excise tax, period. We believe it
is unfair to our current members and particularly
unfair to those members we hope to organize in the
future. If a temporary exemption is the best this
Congress can offer the American people after the
promises of the last election, they will have earned
the wrath of voters in the next election.
"By stringing this 'fix' out until 2018, our members
will be pressured to agree to benefit cuts year after
year in the vain hope they will be able avoid the
excise tax. Companies will seek to shift costs while
still cutting benefits to avoid eight years of
healthcare premiums accelerating at 15% to 20% percent
per year. This is a huge ping-pong ball that our
elected leaders are trying to shove down the throats of
hard-working Americans."
Sacrificing Women's Rights and Immigrants' Rights
If all this were not enough to make it clear that the
"Obama bill should not have passed as it will make
only make things worse," to quote Dr. Marcia Angell,
the bill sacrificed women's reproductive rights for
corporate profits. Jane Hamsher, writing in the
firedoglake.com website, puts it this way:
"This healthcare legislation is the biggest assault on
women's reproductive rights in 35 years. It is a
national shame that a Democratic president who pledged
the repeal of the Hyde Amendment would proudly issue an
executive order affirming it. How far we've come since
2007, when Barack Obama swore that his first act in
office would be to sign the Freedom of Choice Act."
National Organization for Women (http://www.now.org/) President Terry O'Neill
was equally blunt in a statement following the House
vote on March 21:
"As a longtime proponent of healthcare reform, it pains
me to have to stand against what many see as a major
achievement. But feminist, progressive principles are
in direct conflict with many of the compromises built
into and tacked onto the legislation.
"The bill contains a sweeping anti-abortion provision.
Contrary to the talking points circulated by
congressional leaders, the bill passed today ultimately
achieves the same outcome as the infamous Stupak-Pitts
Amendment, namely the likely elimination of all private
as well as public insurance coverage for abortion.
"President Obama made an eleventh-hour agreement to
issue an executive order lending the weight of his
office to the anti-abortion measures included in the
bill. This move was designed to appease a handful of
anti-choice Democrats who have held up health care
reform in an effort to restrict women's access to
abortion."
And if this were not enough, as NOW President Terry
O'Neill writes, "The bill imposes harsh restrictions on
the ability of immigrants to access healthcare,
imposing a five-year waiting period on permanent, legal
residents before they are eligible for assistance such
as Medicaid, and prohibiting undocumented workers even
to use their own money to purchase health insurance
through an exchange. These provisions are
counterproductive in terms of controlling health care
costs; they are there because of ugly anti-immigrant
sentiment."
In a nutshell, the Obama healthcare reform is NOT good
for working people. In fact it marks a big step in the
wrong direction. And the main reason for this is that
it's a plan based on the very private insurance
companies that have created the healthcare fiasco we
face today in our country.
* Do the Health Insurance Companies Hate This Bill?
No. It's not a bill that the insurance companies hate,
as so many have claimed. In fact, the bill is almost
identical to the plan written by AHIP, the insurance
company trade association, in 2009.
Nationally syndicated columnist E.J. Dionne Jr., in a
column published in the March 20 issue of the San
Francisco Chronicle, wrote that, "the ultimate paradox
of this Great Health Care Showdown" is that, "Democrats
have rallied behind a bill built on a series of
principles that Republicans espoused for years." He
continues:
"They have said that they do not want to destroy
the private insurance market. This bill not only
preserves that market but strengthens it by bringing in
32 million new customers. The plan before Congress does
not call for a government 'takeover' of health care. It
provides subsidies so more people can buy private
insurance."
A Few Concluding Comments
Yes, there are some good provisions in this legislation
such as funding for community health centers.
But these provisions could have -- and should have --
been stand-alone measures had there been the political
will to fight for genuine change.
These positive provisions, however, pale in comparison
with the poison pills contained throughout the
legislation -- poison pills that are built into a plan
that not only fails to curb the power of the private
insurance companies, but in fact further entrenches
their power and monopoly over the delivery of
healthcare. This incontrovertible fact belies the claim
by some proponents that the bill can serve as a pathway
toward a single-payer healthcare system.
How Have the Democrats Managed to Carry Out this Hoax?
How is it that the Democrats were able to push through
this sham "healthcare reform"?
One main reason is the support for the Obama bill --
particularly during the six weeks leading up to its
adoption on March 21 -- by the leadership of the
AFL-CIO (http://www.aflcio.org/siteguides/contactus.cfm) trade union federation. In late January, the
bill appeared doomed to die on the vine. Polls showed
that less than 40% of the public supported the bill --
"a significant number of them because the bill did not
go far enough," as Paul Krugman points out in the
International Herald Tribune on March 27-28.
That's when Obama and House Speaker Nancy Pelosi
rallied the troops. The AFL-CIO leadership responded to
the call, organizing public rallies and delivering
millions of letters to wavering Congresspeople to get
them on board.
Democrat after Democrat in fact publicly thanked
AFL-CIO President Richard Trumka and the AFL-CIO
leadership for their "invaluable support" for the
healthcare legislation, stating that without the
AFL-CIO's last-ditch effort, the bill would not have
been approved. Mandate from the AFL-CIO Convention Last
September, at its national convention, the AFL-CIO
voted to support single-payer healthcare as its
long-term objective. This vote -- the result of a
nine-month campaign within labor organized by the Labor
Campaign for Single Payer Healthcare -- marked a big
step forward for the labor federation.
At the same time, the AFL-CIO adopted another
resolution calling on President Obama and the Democrats
to include a public option in the final legislation.
Including the public option, the AFL-CIO leadership
stated, would represent a pathway toward a single-payer
system.
This was the mandate from the union membership.
Throughout the fall, the AFL-CIO campaigned for a
public option and against the excise tax on the union
plans proposed by many of the Blue Dog Democrats. The
AFL-CIO and its healthcare allies obtained pledges from
70 Members of Congress, including Ohio Congressman
Dennis Kucinich, that they would not vote for any
healthcare reform bill that did not at least contain a
public option.
In late January, AFL-CIO President Richard Trumka
issued a statement in which he noted that labor and
all working people cannot rely on the Democrats and
Republicans to obtain our pressing demands. Trumka
stated:
"What happened Tuesday in Massachusetts was a wake-up
call to all of us. It was a working class revolt -- a
signal that in this economic crisis, the American
people demand jobs, healthcare and an economy that
works for them now -- not political business as usual.
...
"For the union movement and activists, the message was
also clear: It's not time to leave it to any political
party to take care of us once we put them in office.
It's time to organize and mobilize as never before to
make every elected or aspiring leader PROVE he or she
will create the jobs we need in an economy we need with
the healthcare we need."
But is the Obama healthcare bill the "healthcare we
need"?
Not at all. The Obama bill did not include
single-payer, which the AFL-CIO now called for, and nor
did it include the public option. It continued to tax
the union plans (albeit at a slightly lower rate than
initially proposed) and to cut Medicare payments for
the elderly. It contained key provisions that the
AFL-CIO had in fact mobilized against.
Was pulling out all the stops in February and March --
as the AFL-CIO leadership did to ensure passage of the
Obama bill -- the way to hold the elected officials of
the Democratic Party accountable to supporting labor's
agenda? Was this a way to press the Democrats and
Republicans to prove that they care about labor?
No, of course not. Even the Wall Street Journal noted
that the "unions folded to the government and the
employers on the healthcare legislation." (Feb. 12)
What Way Forward?
The AFL-CIO leadership cannot fight to defend its
members' interests or to champion the healthcare
interests of the working-class majority so long as it
remains tied at the hip to the Democratic Party.
Subordinating labor's agenda and demands to the
exigencies of the Democrats meant that labor had to
forgo its own healthcare agenda in the interests of the
private insurance companies and the politicians that do
their bidding. On every front today -- whether it's the
Obama administration's trillion-dollar bailout of Wall
Street and the banks at taxpayers' expense, or Obama's
failure to deliver on the Employee Free Choice Act, or
Obama's failure to deliver on any real jobs-creation
program, or Obama's decision to escalate the war in
Afghanistan, or, now, Obama's failure to deliver on the
public option and real healthcare reform -- the Obama
presidency has been an "unmitigated disaster for
American labor," to quote Washington Post senior
staffwriter Harold Meyerson.
For teachers and public-education activists it's not
only Obama's failures that are the problem. In
mid-February, teachers in Rhode Island were summarily
fired, and the union was broken, with the open support
of Obama and Education Secretary Arne Duncan -- all in
the name of the "education reforms needed to increase
productivity."
This "unmitigated disaster" will only get worse unless
the labor movement breaks with the Democrats and
mobilizes around its own independent agenda in huge
numbers in the streets and in the electoral arena
through its own independent political candidates and
party: a Labor Party. The ruling class has two parties
-- the Democrats and the Republicans. Working people
need our own party. Isn't it about time for the labor
movement to break with the Democratic Party and to
begin building its own political party? Isn't it time
to open the widest discussion in the labor movement
about the need to take up the struggle for the Labor
Party?
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