The fear of losing health care

WITH THE financial crisis spreading to every sector of the economy and affecting white- and blue-collar workers alike, the current employment-based system of providing health care is collapsing like a house of cards.

Lawyers, retail workers, computer programmers, journalists and hotel workers are all losing their jobs--and in the process, their health insurance. A December 7 article in the New York Times summed up the situation with its headline: "When a Job Disappears, So Does the Health Care."

The national unemployment rate is at its highest level in 25 years, and joblessness will only get worse. The U.S. has lost nearly 2 million jobs in 2008--533,000 of them in November alone. According to a study by researchers at Georgetown University's Center for Children and Families, 4.1 million people lost employer-sponsored health insurance over the last year. About 2 million of them remain uninsured.

In every state, health care catastrophes are playing out. For example, when employees of Archway and Mother's Cookie Co. at an Ohio facility learned that the company was going out of business, the scramble was on to get medical care before their health care benefits were terminated.

Starla Darling, pregnant with a second child, had her midwife induce labor two days before her coverage was due to expire. She had to have an emergency Caesarean section. Despite the rush, Darling still received a bill for $20,000.

Cookie packer Janet Esbenshade called her doctor and said, "I need to have my gallbladder removed this weekend."

In Georgia, when Michelle Griffin learned that her husband was losing his job at a Chevrolet dealership, the hysterectomy she had put off became urgent. She was able to schedule surgery for the next day. "I wasn't out of the recovery room for 20 minutes when we heard that we had no insurance," Griffin told the Wall Street Journal. She owes $40,000 in medical bills.

COBRA, a federal law that gives certain laid-off employees the right to temporarily continue their health care coverage at group rates, wasn't available to these workers--because COBRA doesn't apply when a company terminates its insurance plan.

And even workers who are eligible for COBRA usually can't afford it, since co-payments for a family can amount to more than $1,000 a month. How can anyone pay that if they are unemployed?

THE AUTO industry stands as a further symbol of what's wrong with a health care system where coverage depends on employment. With every new contract negotiation, automakers Chrysler, Ford and General Motors attempted to shift more of the cost of health care onto their workers.

Last year, the Big Three automakers won a major concession from the United Auto Workers (UAW) in how retiree health care is funded. The union agreed to the creation of a Voluntary Employee Beneficiary Association (VEBA), a union-run health care trust fund to pay for retired workers' health care. The Big Three were supposed to deposit $58 billion into the fund, but in July, GM deferred a payment of $1.7 billion.

"What we were promised in the last contract in 2007 in exchange for very deep concessions was that our health care would be guaranteed in the event of a bankruptcy," said recently retired GM worker Gregg Shotwell. "That was a lie because no money actually changed hands. Here we are today on the verge of bankruptcy, and the VEBA is not funded."

Last month, GM announced it was eliminating health care for all its white-collar retirees, who are not covered by a union contract. Over 100,000 people will lose coverage. Ford and Chrysler have already cut health coverage for salaried retirees.

The auto bosses have argued for years that providing health care for workers and retirees makes their companies less competitive. They claim health care expenses add $1,000 to $1,500 to the price of a car. But while management views health care costs as a "burden," they don't feel the same way about outrageous CEO pay packages--like GM CEO Rick Wagoner, who was paid nearly $16 million last year as his company plummeted deeper into crisis.

What goes for the auto companies is true of employers large and small. Desperate to offload or eliminate health coverage for workers and retirees because of skyrocketing costs, companies have concluded that the employer-based system of health care is cutting too deeply into profit margins.

THE ONLY solution to the health care crisis is a government-financed single-payer system. This would abolish the thousands of private insurance companies--one of the major sources of the crisis--and create a Medicare-like system that would pay all health care bills and cover everyone.

Single-payer isn't a new or untested system of delivering health care. Government-financed health care has existed for decades in most developed countries. These nations spend less on health care, have better health outcomes and cover everyone. The U.S. stands alone in the developed world in not guaranteeing health care to its population.

A bill proposed by Rep. John Conyers (D-Mich.)--known as HR 676--would enact comprehensive health insurance coverage for all U.S. residents, including undocumented immigrants. Medical, dental, mental health and substance use treatment, vision, nursing home care, home health care, prescription medication and medical equipment are covered. Care is free at the point of delivery, and there are no co-pays or deductibles.

There's plenty of money to create, expand and sustain a single-payer system. Funding for the system envisioned under HR 676 would come from a number of sources: a 3.3 percent payroll tax on all employers and employees, a 5 percent tax on the top 5 percent of income earners, a 10 percent tax on the top 1 percent of income earners, repealing the Bush tax cuts for the top 1 percent, and a one-tenth of 1 percent tax on stock and bond transfers.

Today, the average worker pays 24 percent of the cost of his or her insurance premium. Under a single-payer system, 95 percent of people would pay less. An estimated $350 billion would be saved in the first year of a single-payer system, as a result of reduced administrative and marketing costs, elimination of profits for the private insurance industry, and bulk purchasing of prescription drugs.

Most importantly, Conyers' bill would make health care a human right, with the goal of ending the health care horror stories of care denied and people losing their coverage if they lose their jobs.

One opinion poll after another shows that single-payer has broad support. In 2003, a Washington Post-ABC News survey found that 62 percent of people said "yes" to the following question: "Do you support a universal health insurance program in which everyone is covered under a program like Medicare that's run by the government and financed by taxpayers?" Last year, an Associated Press-Yahoo poll asked the same question, and the percentage saying "yes" increased to 65 percent.

Even doctors are turning to single-payer. A study published in the Annals of Internal Medicine in March found that 59 percent of doctors "support government legislation to establish national health insurance."

HR 676 has 93 cosponsors in the House of Representatives. To date, 39 state AFL-CIO federations, over 100 Central Labor Councils and 480 local unions have endorsed the bill. Yet no major news outlet reports consistently on HR 676 or this widespread support. No media have featured interviews with Conyers or other prominent supporters of the bill, such as the California Nurses Association or Physicians for a National Health Plan.

The reason is that single-payer is seen as "unrealistic." Barack Obama says that health care reform is at the top of his agenda. But Tom Daschle, his choice for Health and Human Services Secretary, plus Senate leaders Max Baucus and Ted Kennedy, as well as the Obama transition team have all signaled that single-payer is off the table.

It's up to the grassroots single-payer movement to get this solution back on the table--and to build a campaign that forces the Obama administration to get rid of the private insurance industry once and for all.