Dennis Prager posed 10 questions to supporters of “Obamacare”1 This post answers them in the order asked. I have endeavored to support my contentions with facts from sources which are non-partisan, but I will state up front that I am a supporter of comprehensive health care reform that includes a robust public option.
- Question 1: “If Medicare and Medicaid are fiscally insolvent and gradually bankrupting our society, why is a government takeover of medical care for the rest of society a good idea? What large-scale government program has not eventually spiraled out of control, let alone stayed within its projected budget? Why should anyone believe that nationalizing health care would create the first major government program to “pay for itself,” let alone get smaller rather than larger over time? Why not simply see how the Democrats can reform Medicare and Medicaid before nationalizing much of the rest of health care?
Answer: It goes without saying that Mr. Prager has posed 4 questions here, but since they’re related, I’ll tackle them as one. The fundamental question he appears to be asking is “Why should I believe government can do this right when they’ve done everything else wrong?”
Mr. Prager’s premise is flawed. It assumes that the problems with Medicare and Medicaid relate to the government operation of those funds when in fact, the real problems stem from the so-called “Medicare Reform” and Medicare Advantage plans. Medicare Advantage Plans are a ‘Medicare Alternative” provided by private insurers; in essence, an effort to privatize Medicare. According to the Commonwealth Fund, payments to private insurers increased costs over what would have been paid had the Medicare system remained under public oversight.
The Medicare Modernization Act of 2003 sharply increased payments to private Medicare Advantage plans. As a result, every plan in every county in the nation was paid more in 2005 than its enrollees would have been expected to cost if they had been enrolled in traditional fee-for-service Medicare. The authors calculate that payments to Medicare Advantage plans averaged 12.4 percent more than costs in traditional Medicare during 2005: a total of more than $5.2 billion, or $922 for each of the 5.6 million Medicare enrollees in managed care.
A glance at insurers’ profit reports confirms this. From BusinessWeek’s report about United Healthcare’s record profits for the second quarter of 2009 on decreased enrollments:
“We expect this year’s revenue growth in public and senior business to continue to more than offset the potential for further pressure from the employer market,” UnitedHealth CEO Stephen J. Hemsley said in a conference call with analysts.
Further, VA hospitals (a government-run single payer system) consistently outperform private hospitals. (Washington Post)
In other words, Mr. Prager, it isn’t the GOVERNMENT that’s running Medicare and Medicaid into the ground. It’s the for-profit insurance companies whose profits are earned on the backs of American taxpayers.
- Question 2: [Re: Pre-existing conditions exclusions] But if any individual can buy health insurance at any time, why would anyone buy health insurance while healthy? … The whole point of insurance is that the healthy buy it and thereby provide the funds to pay for the sick.
Answer: This is why there is a distinction made between “access to health care” and “health insurance”. To be clear: Health benefits are a risk pool. They are not “insurance” like car insurance or life insurance. The premise behind life insurance is that an insured will live long enough that the premiums paid will cover the pure cost of providing insurance. The premise behind auto insurance is that drivers won’t have car accidents, but if they do, the insurance company will cover the damages attributable to their insured. If drivers don’t have accidents, the company wins. If drivers do have accidents, the company has the option to drop them or assign them to a more expensive risk pool. Now that auto insurance is mandatory in many states, however, all drivers must have access to insurance, and so state-mandated high-risk policies are available and required to be carried by high-risk drivers at, yes, a higher cost to them.
Health insurance is entirely different. It is implicit that everyone will need health care at some point. The best outcome there is: a risk pool diverse enough so that premiums paid will cover benefits due in any given year. To raise their profit margins, insurers ‘purify the risk pool’ by denying coverage to anyone who might possibly develop a condition requiring treatment. By purifying the risk pool, claims are lowered and profits rise, which makes a healthy balance sheet and an unhealthy population.
It is a fact that without health benefits, people avoid seeking treatment for conditions which, when untreated, can become life-threatening conditions. Preventive medicine is a cost-saving measure which is included as part of the House health care reform act and which benefits our society as a whole. Excluding people from access to health benefits because they have a pre-existing condition forecloses preventive care, guarantees that at some point they will turn to the government for assistance because there is nowhere else to turn, and they will do so at the point where treatment costs are most expensive.
- Question 3: “Why do supporters of nationalized medicine so often substitute the word “care” for the word “insurance?” it is patently untrue that millions of Americans do not receive health care. Millions of Americans do not have health insurance but virtually every American (and non-American on American soil) receives health care. ”
Answer: See my answer to Question 2. It is somewhat disingenous to suggest that the government can’t manage health care benefits and then turn around and claim that everyone ultimately has access to health care. Anyone who has faced a serious illness, injury or condition which requires hospitalization, surgery, or chronic illness care knows that they only receive health care at the risk of losing everything they have worked for, including their home, their job, their savings and their livelihood.
- Question 4: “No one denies that in order to come close to staying within its budget health care will be rationed. But what is the moral justification of having the state decide what medical care to ration? ”
Answer Health care is rationed now. Some people get it and others don’t. The ones who don’t are the ones with pre-existing conditions, the middle class, the self-employed, and the unemployed who cannot afford COBRA continuation benefits. Those who decide the rationing process are the for-profit insurers, who make their decisions based upon their balance sheets, rather than any moral, medical or social good. What Mr. Prager is asking us to accept is that corporations who have a duty to make a profit and distribute those profits to their shareholders will somehow make medical care decisions which are morally superior to public servants whose only duty is to the people they serve.
- Question 5: “Given how many lives — in America and throughout the world – American pharmaceutical companies save, and given how expensive it is to develop any new drug, will the price controls on drugs envisaged in the Democrats’ bill improve or impair Americans’ health?”
Answer: Given that the price controls relate to established medications which have gone long past the patent expiration and are available as generics, it would appear that this argument is moot. Further, the price controls on drugs are controls agreed to by the pharmaceutical industry.
Finally, Medicare is currently prohibited from negotiating drug prices under Medicare Part D, that ‘reform’ passed by the Republican Congress under George W. Bush’s watch, which has caused the costs of the Part D benefit to balloon in the past 5 years to double the original CBO score.
- Question 6: “Do you really believe that private insurance could survive a “public option”? Or is this really a cover for the ideal of single-payer medical care?”
Answer: This is the heart of the argument at last. Even insurance companies agree that everyone should be covered and pre-existing conditions exclusions should go away. However, they want that captive group — the 47 million uninsured who will now be required to buy insurance. Introduction of a public option means they cannot operate in a monopolistic fashion. They will have to compete.
As demonstrated with Medicare Advantage plans, insurers have figured out how to be profitable and compete, provided they receive government subsidies. Administrative costs in private insurers’ plans are twice the cost of public Medicare costs. Insurance companies “save” by excluding those who might be a risk.
One possibility for profit margins: Split the company. Make the company providing the basic benefits a not-for-profit company, and offer insurance through a for-profit company for ‘luxury benefits’. Insureds could hold policies with both. That’s just one idea. Trust me on this. Insurance companies always find ways to make profits. I have yet to see one who hasn’t. It just means they’re not quite as in control of things as they were before. Now they have a true competitor in the same market, something that has been sorely lacking.
- Question 7: Why will hospitals, doctors, and pharmaceutical companies do nearly as superb a job as they now do if their reimbursement from the government will be severely cut? Haven’t the laws of human behavior and common sense been repealed here in arguing that while doctors, hospitals and drug companies will make significantly less money they will continue to provide the same level of uniquely excellent care?
Answer: Hospitals and pharmaceutical companies have agreed to these cuts, and have participated in the process and the dialogue. Presumably they have done so because they expect to benefit in other ways. As for doctors, it’s my understanding that there are still some open issues on how they will be compensated and what “outcomes-based” medicine means in terms of the final health care reform bill. I do think this question is valid and deserves a more specific answer, which may be forthcoming as the bills are reconciled in committee.
- Question 8: Given how many needless procedures are ordered to avoid medical lawsuits and how much money doctors spend on medical malpractice insurance, shouldn’t any meaningful “reform” of health care provide some remedy for frivolous malpractice lawsuits?
Answer: Tort reform applies to many areas. Health care is only one. Shouldn’t tort reform be tackled as its own reform dealing with the different areas it touches upon, particularly given the coordination with state law?
- Question 9: “Given how weak the U.S. economy is, given how weak the U.S. dollar is, and given how much in debt the U.S. is in, why would anyone seek to have the U.S. spend another trillion dollars? Even if all the other questions here had legitimate answers, wouldn’t the state of the U.S. economy alone argue against national health care at this time? ”
Answer: No. There is no question that the health of the economy is inextricably tied to the health of the population. Further, no one is proposing the expenditure of one trillion dollars. The President has said over and over again that he will not sign anything into law that is not deficit-neutral.
- Question 10: Contrary to the assertion of President Obama — “we spend much more on health care than any other nation but aren’t any healthier for it” — we are healthier. We wait far less time for procedures and surgeries. Our life expectancy with virtually any major disease is longer. And if you do not count deaths from violent crime and automobile accidents, we also have the longest life expectancy. Do you think a government takeover of American medicine will enable this medical excellence to continue?
Answer: Mr. Prager is basing his assertion on what facts? These are the facts I see:
- In 2008, the US ranked last in rankings focused on preventable deaths due to treatable conditions.
- The US ranks last or next-to-last on a five-point ranking system of performance: quality, access, efficiency, equity, and healthy lives. It also shows a lag in adoption of IT and use of nurses for care coordination of chronic diseases. (Commonwealth Fund)
- The US performs best on preventive care, if patients have access to it. (Commonwealth Fund) See also the Kaiser Foundation report on Health Care and the Middle Class: More Costs and Less Coverage
The facts point to the truth of President Obama’s assertion. Waiting less time for procedures and surgeries is only good if one has access to the procedures and surgeries. 47 million people don’t. Our life expectancy with any major disease is not necessarily longer, nor is the quality of life better. The problem is not with the practitioners of medicine in the US. The problem is getting access to practitioners.
A pattern and a message emerge from Mr. Prager’s questions. What they are intended to suggest to the reader is that we live in some kind of utopia where we have the best health care available, delivered by the best system in the world. In fact, we have great practitioners, but a growing group of the population has no access to those practitioners. If I had a dime for every person I’ve heard tell me they’re afraid they have some disease or condition but can’t go to the doctor because they don’t have health insurance, I’d have enough money to pay my COBRA continuation premiums for the rest of my life.
Mr. Prager is playing ‘head in the sand’ argumentation. I truly believe that he believes that if we close our eyes and say over and over “there’s no place better than the US”, our health care system will magically improve. The truth is different. Until we face the issues head-on and deal with them, with the understanding that there are just some things government really CAN do better than private enterprise, our economy and our health will continue to suffer.
1 A term I object to since it politicizes a discussion which should be non-partisan and rationally addressed. Health care is an issue that affects each and every one of us, Republican or Democrat.
Updated post at 3:11pm to include VA reference and Medicare Part D reference
GREAT JOB KAROLI!
Wow Karoli, well done! I will definitely refer to this piece over and over again when arguing with my conservative friends. Thanks!
This is absolutely outstanding. Thank you for your ongoing efforts.
I'm in a position to experience directly both Canadian and American systems and have serious (from birth) “pre-existing” conditions. I can say that, for instance, a simple 15 minute office treatment (a conization) cost (a few years ago) $400 in Canada and was projected at $11,000 in the USA. Explain this.
I want to add also re: the pharmaceutical industry. I am a DES daughter and , in my case, this caused in utero major organ damage as well as the better known cervical cancer problems. We never have won a class action suit although virtually every case brought on an individual basis has been won, out of court.We also managed to get partial bans on Stilbesterol and its use in beef cattle feed. But guess what? Since DES was banned in USA, the drug companies have seen to it that it's recommended and given in large quantities to women in “3rd world” countries.
So now we have more generations affected all for the profit margin of pharma companies.
AS far as comments about “non Americans on American soil” go: This is the most insidious attitude of all. Here in Southern California on the border, what happens in Tijuana for example can and will affect public health in California. And the same goes when there is no universal treatment/prevention of the most basic public health scenarios such as TB, Cholera…yes, these rear their ugly heads here. The idea that somehow if we don't treat “illegal” children, that we can draw some artificial border between “us” and disease, is the height of stupidity. The conditions that breed disease and public health crises are alive and well here including poverty, homelessness,lack of access to basic care.
No number of walled communities and border fencing will protect you from the spread of preventable diseases.
I could not agree with you more, particularly about the issues between “legal” and “illegal”. The swine flu outbreak is a shining example of that, and we're not even close to understanding how far-reaching that virus will go.
I was actually heartened to see Prager frame his questions/arguments the way he did, because they just ring hollow. They're the same arguments that have been made for 100 years, and now we have the benefit of hindsight to counter them with. Clear, unambiguous hindsight.
Thanks for sharing your thoughts. It chills me to think that DES is being used in 3rd world countries. Right down to the bone.
Excellent, I'm glad it helps. Ten years from now we're going to look back on the conservative arguments and shake our heads, wondering how on earth they got such traction. If 100 years of history doesn't teach us, nothing will.
Thanks, dl.
You point out that Obama has said he won't sign any bill that is not deficit neutral and argue that no one is proposing spending a trillion dollars. That is simply not true.
Unless we aren't paying for this until the savings have been reached, that money is coming from somewhere, and I doubt health care providers are going to just defer billing for half a decade at best. So, a trillion dollars will either be pulled out of the private sector somehow or this money will be printed. If it is printed, that devalues the dollar even further, in a time of economic weakness.
Then, we might make up for that trillion dollars in savings. Obama speaks about it with certainty, but few others do. Many may hope that this is the case, but it is far from a certainty. Plus, we need to consider the economic impact of reallocating this money in the meantime, the inflation that followed, the loss of employment that happens in between taxes being raised and the alleged savings occurring.
Your response is a talking point. I know you believe it, but there are very real and significant economic implications, that frankly no one can say one way or the other what will happen. You might as well roll the dice, because any economist who says how the implementation of this plan would play out is just wrong.
Now, this may not mean it is unviable as a plan. But when someone ignores very real concerns and dismisses them as GOP lies, I am concerned. I would rather see contingency plans for what will happen if things don't go smoothly.
Also, President Obama saying that he won't do something should not fill you with confidence. He has a history of backing away from promises once they have served his purpose. His handling of the stimulus plan was abysmal, and he has earned every ounce of skepticism that he is experiencing from the American public.
Kyle, my aim here was to state fact. Fact 1: Obama has said it must be
deficit-neutral. Fact 2:One trillion is an investment amortized over
10 years, and includes the seed money to fund the public option as
well as appropriations for other oversight areas of the bill. Again,
amortized over 10 years and offset by tax increases (which I believe
are unlikely…I think it will be something else), savings, withdrawal
of Medicare Advantage subsidy, etc. We could withdraw the subsidy for
Medicare Advantage, I suppose, and do nothing more. Of course, the
costs would be substantially higher. Have you considered the
ramifications of doing nothing and what that would do to the deficit?
I'd be curious to see those numbers, particularly the swelling
Medicaid rolls as the ARRA subsidy ends and those people roll off
their COBRA coverage due to their inability to continue the premiums…
I am fully aware that the cost of doing nothing is high. This has been framed as doing THIS plan versus doing nothing, which is a false dichotomy.
I think, though, that we should be finding the aspects of this plan with the most certain benefit/cost ratio and implement those.
On that basis we'd continue to exclude anyone with pre-existing
conditions.
I am so used to being attacked ad hominem by opponents on the left that I read your serious responses to my serious questions with respect and gratitude. We certainly continue to differ, but you have earned my respect as someone who argues respectfully.
I would only add that my fundamental belief is that the bigger the state and government get, the smaller the citizen becomes.
Dennis Prager
Thank you for taking the time to come by and respond. The conflict is indeed between your fundamental belief that bigger govt=smaller citizen and my belief that a govt by, of, and for the people can function for the good of those they serve. The challenge is to find ways to come from two different corners and find a decent middle ground…which is what I hope we do after all the shouting dies down.
Health care reform is without a doubt necessary, but I don't think we need to change the whole system for problems that can be identified. You wouldn't rebuild your whole car from bumper to bumper if you had a broken water pump. You would identify the problem and fix it. May be I'm over simplifying this, but it's an easy concept to grasp. Karoli,you have brought up some good points about our current system, however there was no mention of the tremendous amount fraud and waste perpetuated by our Government run programs, like Social Security, Welfare. These should be legitimate concerns to you as an American tax payer. I do not trust our Politicians or our Government, I don't care for the Republican or the Democrats parties they both have special interest groups backing them. I do not trust Obama, although an accomplished speaker and very charismatic, he has made several contradictory statements, he's for a Universal Health Plan then he's not. He makes very damaging statement, saying the “Police acted stupidly” before he knew the facts. Mr. Obama should never had said that, his words carry more weight then anyone else in the US and he did more damage to race relations then the actual incident. I'm not saying he's a racist, but I feel he was trying to use the situation for political gain. Anyways back to the Health Care P. There is no plan, it's only a concept that needs to be studied thoroughly and refined before some super complex bill is made into law and we are stuck paying for it.
Very well thought out answers. As stated by others the $$ numbers are not “set in stone;” but the cost of maintaining the status quo is something that everyone agrees will be even higher. The basic premise, I think, will be met; the details are still illusive because we are not talking about a specific bill.
One commenter says President Obama has not kept his word and specifically refers to the stimulus. I'm not sure what he is referring to but can't think of a way the President was untruthful except in the fact that he wanted bipartisan support and only got 3 GOP votes. He did include GOP ideas which ultimately weakened the bill.
One person can't pass a bill; therefore, a bill will change and there will be parts the original person might have wanted that are removed or things added. That is the way our system works.
Mister Prager, if you respect reasoned responses, why don't you demonstrate this more on your show? Most of what I hear when I tune in is rah rah conservatism cheerleading and name-calling from your listeners, which you do little to discourage.
I really appreciate these responses to your questions.
It has been studied to death. You want studies? I can point you to
studies conducted over the past 40 years that all reach the same
conclusion. It's funny — I read a speech given by Richard Nixon in
1971 just before he signed the HMO act in to law…It began the very
same way the proponents of health care reform start their arguments —
the bite out of the GDP, the rise in costs, not getting bang for the
buck, etc, etc.
This is not a new issue. It isn't going to go away. You can stick your
head in the sand and claim that the evil government is…well, evil
for wanting to take care of people, but frankly, this is part of what
government SHOULD do.
As for your fiscal responsibility/tax concerns, were you this
concerned when George Bush pushed through the biggest expansion to
Medicare in history with NO WAY TO PAY FOR IT? Were you this concerned
when he started a senseless war with Iraq that has cost countless
lives, will put a huge burden on the VA to care for the injured and
traumatized, and drove up the national debt by a few trillion?
Probably not. Because for some weird disconnected reason, war seems to
be something we can dig into our pockets and pay for, like ice cream
in a depression, but addressing the very real, very serious
disparities in our health care system seem to be less than even half a
priority for that same group.
You prove Mr. Prager's point a couple of times.
On Q1, you blame private insurers for Medicare's problems… which was going insolvent well before 2003. The legislation, BY GOV'T, then contributed to the problem. You can blame private insurers for interest money and gaming the system, but gov't was still the instrument used.
On Q2, you ignore the CBO estimates that repudiate your assertions of cost savings.
On Q3, catastrophic illness and cost is a problem and should be addressed specifically without slapping an untested, unproven system in place that would directly or indirectly impact every single person in the U.S. The administration has waffled on both the care and insurance reforms… arguing for the former one day and the latter then next. What is it they want? Without a final bill, how do we know? Considering the administration wanted votes taken before anything could be absorbed, they now lack the credibility to sell changes to the system.
Q4, we all agree then that health care is rationed in some way. It's basic economics of supply/demand. How do insurance companies make profit? By being better than the competition. Just as it may be disingenuous to think there are no problems with insurance companies, it is also naive and disingenuous to claim not-for-profit gov't would provide better and cheaper care. With no profit incentive to compete, how would government care manage costs? As with other gov't programs, it wouldn't. So how would it compete? Through legislation as it has done with Medicare, yet many require supplemental coverage to Medicare and it is still insolvent.
Q5, proves point again that government is a source of problems and should not be trusted to handle something this important.
Q6, Why implement a massive, costly system to “compete” when you could generate greater competition by allowing sales across state lines? Gov't doesn't manage Medicare like any company manages health care/insurance. Gov't just dictates payments and offerings. It would have no idea how to implement the superstructure needed as a business.
Q7, I think the laws of supply and demand will show that gov't control of costs will reduce the supply of competent health professionals. A reduced supply will lead to greater costs and rationing… unless we plan to force people into certain career choices for the good of the people.
Q8, We agree that tort reform is needed, so why hasn't it been on the table?
Q9, With such an intertwined economy, I think the number crunchers and accountant types should have a strong say in the feasibility of the proposals… and so far, the CBO says the legislation being debated are monsters.
Q10, Your facts have been debunked and the Commonwealth Fund is an advocate of single payer, so the source is not credible for multiple reasons. If it is that dire, why do polls show most American's like their health care and why is Obama paining himself to say to us that if we like it, it won't change? Also, the 47 million number has been clarified many times and the true uninsured number isn't that large.
Pre-existing conditions and catastrophic illness appear to be good starting points for reform. If we look at market approaches to those and address them, the uninsured numbers will start to come down. If we look at solutions for specific things (like tort reform), then see the impact to the system, I think it would be much better than a massive, unproven overhaul with gov't calling the shots. Given the partisanship, special interest monies, and corruption that exists and has existed in gov't (evidenced by scandals galore), why should we trust government? Respectfully.
A very enjoyable and informative read.