Is Obamacare a step toward single-payer?

January 14, 2014

Gary Lapon examines the proposition that the left should support Barack Obama's health care law because it will lead toward health care becoming a human right.

NO, NO and no: That's been the Republican Party position on health care reform since the Obama administration's first months in office. No matter how many pro-industry concessions were made in drafting what came to be called the Affordable Care Act (ACA), Republicans never wavered in their all-out opposition.

But increasingly since its disastrous rollout last fall, the ACA has had critics from the left, too--people who oppose a "reform" that falls far short of universal coverage while threatening harsh financial penalties on those who can afford them least unless they purchase the defective products of the private insurance industry.

Groups that criticized the ACA all along, such as Physicians for a National Health Program and National Nurses United, continue to stand for a "single-payer" program--where the government cuts out the insurers and guarantees health care for all under a system similar to the current Medicare program for the elderly, but much better funded and available to the whole population.

Nurses and activists march for a single-payer health care system
Nurses and activists march for a single-payer health care system (Michael Fleshman)

Then there are those among liberals and the left who disagree with both sides. They continue to defend the ACA--on the grounds that it is a step toward universal health care.

An editorial in the Nation magazine last month, for example, acknowledged that the ACA came about because Barack Obama and Democratic leaders in Congress "believed [single-payer] was politically unachievable, so they cobbled together a hybrid of public regulation and private insurance that has come back to haunt them."

Nevertheless, wrote the Nation's editors, the left should defend this "hybrid": "Progressives must step in not only as ardent advocates for better implementation of the ACA--a relatively easy task--but also for structural repairs to the law that will make it a better bridge to the truly universal, truly humane and truly functional health care system that America needs...Indeed, winning [the fight for the ACA's effective implementation] will make future reforms all the more possible."

The Nation is wrong. The ACA isn't a bridge to universal health care. It is a cul-de-sac, structured above all else to maintain the central role of the health care industry in general, and private insurance companies in particular.

Achieving universal health coverage and access to care will require dismantling the core of the ACA and replacing it with something else entirely. Making a defense of the ACA in the way the Nation does--as a step in the direction of a single-payer system--cedes ground to the right and is counterproductive to the goal of winning health care as a human right.

THE CENTERPIECE of the ACA--the "individual mandate" that requires the uninsured to purchase private health insurance policies or face a penalty on their taxes--was first proposed in 1989 by the Heritage Foundation, a prominent conservative think tank. In the 1990s, the Heritage plan was promoted by Republicans, led by former House Speaker Newt Gingrich, as an alternative to the Clinton administration's plans for health care reform.

In contrast to the Clinton proposal--which, while far short of a single-payer system, was considerably more progressive than the ACA--Gingrich and the Heritage crowd proposed a mandate that placed the burden of obtaining coverage on individuals, rather than the government.

Like Clinton's proposal (which never made it to a vote in Congress), Obama's ACA also requires large employers to offer health insurance to employees--the so-called business mandate--although the penalty for businesses is smaller than the cost of coverage and has been delayed for at least a year.

The Heritage Foundation model was later implemented--in Massachusetts, under then-Gov. Mitt Romney, the eventual 2012 Republican Party presidential candidate. Nothing more clearly exposes the hypocrisy and crass opportunism of the Republicans, who from 2009 on have been denouncing health care "reform" from Obama that most closely resembles a model championed by one of its own only a few years before.

The ACA isn't a case of Democrats and Republicans "meeting in the middle" to find common ground between universal health care and the free market. Rather, it is a case of the political spectrum itself shifting to the right--to the point where Democrats occupy space formerly held by Republicans, and the Republicans denounce their former proposals as "socialism."

With the individual mandate at its core, the ACA is, first and foremost, about making sure health insurance remains "based on the private marketplace," as Obama described his law at the Wall Street Journal CEO Summit in November.

But the private marketplace--and the attendant prioritization of profits over care--is the root of the problems with the U.S. health care system. Money comes first in a free-market system, so those without the money to afford a given commodity go without. So it is with health care--and the 30 million people who will continue to go without coverage under the ACA, as well as millions more who will forgo needed care because they can't afford to spend thousands of dollars every year on copays and deductibles.

IT WAS clear from the start that defending the health industry would be the priority of Barack Obama's health care law. Consider who played a leading role in drafting the legislation.

As chair of the Senate Finance Committee, Max Baucus ended up with responsibility for writing the law--he happened to be one of the leading recipients of donations from the health insurance and pharmaceutical industries.

Baucus brought in Liz Fowler, a vice president for the for-profit insurance giant WellPoint before she left to join Baucus' team. It was Fowler who, according to Baucus, wrote "the 87-page document which became the basis, the foundation, the blueprint from which almost all health care measures in all bills on both sides of the aisle came."

At the end of 2012, Fowler returned from whence she came: She left her post at the Department of Health and Human Services to take a job lobbying for Johnson & Johnson, the pharmaceutical and medical device manufacturing corporation--a perfect illustration of the revolving door between Corporate America and the Washington that ensures government policy meets the needs of the bottom line.

Baucus deliberately excluded voices for single-payer from Senate hearings on the legislation--instead, he had doctors and nurses who supported a radical alternative arrested. Not only did the Democrats exclude single-payer from the discussion, they conceded on even the half-measure of a "public option" among the choices available for the uninsured looking for coverage at the government "exchanges."

But none of that mattered anyway--despite all of the Democrats' industry-friendly concessions, the Republicans continued to oppose the ACA until the end.

FAR FROM a step in the direction of single-payer, the ACA has made achieving universal coverage much more difficult.

The ACA entrenches the role of private health insurance--"multiple payers" instead of a "single payer"--by mandating the uninsured to purchase coverage or face a penalty. While the law requires private plans to meet minimum standards, coverage sold on the "exchanges" set up under the ACA are grouped into different tiers, and employer-based plans will continue to vary widely in quality.

Hence, health care inequality will persist--and many will go without care, whether they remain uninsured or can't access care because of high co-pays and deductibles.

Had the ACA included the "public option"--alternative coverage administered by the government available from the "exchanges"--it might have been possible to believe that the ACA would have transitioned into single-payer over time, as the public plan outcompeted private plans because of lower administrative costs and other factors.

Single-payer supporters were skeptical of this all along, but it's a moot point now. While claiming publicly to be pushing for a public option, the Obama administration made a deal with industry lobbyists, assuring them the public option wouldn't make it into the final bill. Sure enough, the public option was dropped.

The ACA makes the insurance industry stronger than ever before by handing it more customers and $1 trillion in subsidies over the course of 10 years. Greater revenues will translate into increased political power, which can be used to resist further regulations--and, obviously, any moves toward a single-payer system that would eliminate the private insurers altogether.

The ACA also includes around $500 billion in cuts to Medicare over ten years. This was initially supposed to include cuts to Medicare Advantage--where the government pays private insurance companies to administer Medicare benefits. However, the Obama administration reversed these cuts to private insurers in April 2013, sending insurance company stocks soaring.

Among the Medicare cuts that weren't reversed are a 14 percent reduction in payments to home care health agencies over the next three years, tens of billions in cuts to skilled nursing and hospice services, and some $260 billion in cuts to hospital reimbursements.

On top of all this, Obama offered to raise the Medicare eligibility age from 65 to 67 as part of his effort to secure a "grand bargain" with Republicans to carry out unprecedented austerity.

Even without the eligibility change, these cuts place the elderly and the disabled--those who are eligible for Medicare--at a disadvantage relative to patients with private health insurance, since doctors and hospitals make more money providing the same care for the latter. This, combined with a relative shortage of primary care physicians and the actions of Medicare Advantage plans such as UnitedHealthcare, which recently cut 10-15 percent of doctors in their plan, could reduce access to care for those with Medicare.

Medicaid pays even less to doctors and hospitals than Medicare does, so health care providers serving disproportionately low-income, elderly and disabled populations could face layoffs and even closure.

And all this has been made even worse by state governments dominated by Republicans that rejected the expansion of Medicaid included in the ACA under the U.S. Supreme Court decision in 2012.

If any part of the U.S. health care system could serve as a "bridge" to a single-payer system, it's Medicare. If Medicare's eligibility age limiting the program to seniors were eliminated, allowing everyone to be automatically enrolled in Medicare, this would be a tangible and completely realistic step toward truly universal coverage. Instead of expanding Medicare, however, the ACA cuts it.

THERE IS one more question that those who believe the ACA will lead toward single-payer need to answer--the impact on a developing sentiment in favor of a public health care system like what exists in Canada.

Health care was a major issue in the 2008 election. Opinion polls before the election showed overwhelming majorities supporting a serious overhaul of the health care system. Nearly two-thirds supported the government guaranteeing health insurance for all, even if that meant paying higher taxes.

Michael Moore's film Sicko, released in the summer of 2007, exposed the devastating effect of for-profit health care on the lives of ordinary people. There was a growth in grassroots activism around the country, with doctors, medical students, nurses and other health care workers joining together with patients to demand universal health care for all. By the spring of 2009, with the health reform debate ramping up in Washington, a national day of action brought out single-payer supporters in all 50 states, including over 3,500 people in Seattle.

The shift in public opinion was undeniable. A New York Times/CBS News poll in June 2009 found that 72 percent of people supported "the government's offering everyone a government-administered health insurance plan like Medicare that would compete with private health insurance plans"--essentially, the public option.

The passage of the ACA, with the public option stripped out, took the wind out of the sails of a growing movement and ultimately reversed the trends in popular opinion. Large sections of existing and potential support for single-payer--in particular, among organized labor--were mobilized to support legislation that was antithetical to single-payer. The combination of unanswered Republican attacks on "socialistic" Obamacare and growing disillusion with what the Obama administration actually came up with has corroded support for any government role in health care.

NOW THAT the law is finally kicking in, it is important that supporters of genuinely universal health care not allow the Republican right to be the only voice criticizing the ACA.

The failures of the ACA are becoming apparent to more and more people--those forced to buy insurance plans with thousands of dollars in co-pays and deductibles and skimpy networks, the 30 million who will remain uninsured, union workers facing cuts to their health benefits as ACA taxes on "Cadillac plans" loom.

The left must be able to recognize the positive measures in the ACA--ending insurance company discrimination against people with pre-existing conditions, the expansion of Medicaid, the requirement that insurance companies spend at least 80 percent of premiums on care and so one--while opposing the core of the legislation that forces millions of people to purchase defective policies from private insurers, thus locking in one of the central causes of the health care crisis.

There is no reason why the left should not demand a rollback of the ACA's reactionary components, like penalties for the uninsured and the tax on good health plans disproportionately held by union workers.

It is up to supporters of true health care reform to put forward an independent alternative--to demand truly universal coverage and access to care. If health care in the U.S. is ever to be made more equal, the movement for single-payer must regain the momentum lost since the passage of the ACA--and fight for health care to be the human right it must be.

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