What’s In the Health Insurance Bill, What’s Not

What’s weird about the whole health insurance fracas is that Republicans and some insurance company execs fought just as hard against the crappy bill we have before us as if it were really what they claim it is: a vast government “intrusion” into health care.

Democrats and liberals (I separate those two terms) are celebrating the bill as historic, in the tradition of the New Deal, Social Security, and Medicare, when in fact it’s a step in the opposite direction—away from collective responsibility, preserving profits as the linchpin. One journalist called the provisions that will take effect four years from now “breathtaking.”

It’s as if neither side knew what’s actually in the bill. (But I guess anyone who could label President Obama a socialist would believe anything.) Read two sober, if angry, analyses of what’s in store for us here and here. The AFL-CIO, on the other hand, calls the bill a “momentous step toward comprehensive health care,” “not a baby step or half measure,” “an opportunity to change history.”

First of all—this bill is about health insurance, not health care. In a briefing Monday night, Michael Lighty of National Nurses United pointed out that although the bill may cause more people to have insurance, “the problem is there is no guarantee that that insurance provides the care that people need.”

Lighty argued that insurers can still deny care, refuse claims, cancel policies when coverage is needed most, and provide substandard insurance. One reason is that there are no federal standards for reviewing the companies’ decisions; each state will set its own. And the bill allows insurers to sell their products across state lines, giving companies the opportunity to base their offerings on the weakest rules and regulations they can find.

“Insurance companies remain in full control of what they offer and what will become a covered service,” he said.

Lighty pointed out plenty of loopholes, such as the right to charge older people three times more than younger ones. By 2014 the companies won’t be able to deny adults coverage because of preexisting conditions—but they’ll be free to make their policies so expensive no one can afford to buy them.

THE PICK-POCKET MANDATE

I do agree with the right-wingers on one point: they’re angry that the bill will force individuals to hand over money to the insurance companies. Which is odd: politicians’ support for government hand-outs to corporations is usually bipartisan, whether it’s to build a stadium or to attract a factory to your state.

The conservatives don’t mind when your tax dollars are given away to profit-making companies; they just don’t want you to have to pony up individually.

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There was one final humiliation for the labor movement, when AFL-CIO President Rich Trumka was summoned to the White House a week ago to be informed that the deal he’d brokered on taxing health care benefits was about to be violated. The change was not likely to be noticed by most, and it’s hard to say exactly how it will affect union members and others who have high-cost employer-provided health insurance.

On January 14 Trumka had announced—with flowery praise for everyone from Nancy Pelosi to Harry Reid—that he’d managed to negotiate an improved formula for determining the threshold at which the 40 percent excise tax will kick in.

That infamous tax is scheduled to begin in 2018 for plans that cost more than $27,500 for family coverage—and if insurance companies keep raising prices at current rates, all predictions are that plenty of folks will be hit. To keep customers from hitting the threshold, Trumka’s January deal was that the $27,500 threshold would be indexed upwards each year, by the rate of inflation plus one percentage point.

But according to media reports, beginning in 2020, the threshold will now be adjusted upwards only by the inflation rate. The effect would be for more plans, and more people, to be subject to the 40 percent tax.

The AFL-CIO, on the other hand, claimed victory, saying the final bill exempts all plans until 2018, not just union-negotiated plans. That is indeed a good step—fulfilling labor’s obligation to speak for all working people. Trumka expressed confidence that the federation can kill the tax before it kicks in, regardless. Let’s hope he’s right, but what clout is he planning to roll out that he didn’t deploy in 2009-2010?

In any case, the last-minute amendment, followed by Trumka’s still-enthusiastic endorsement of the “historic” bill, was just one more indication that Democratic politicians feel they have little to fear from back-stabbed labor leaders.

Indeed, the Democrats who crafted this complicated subsidy to the insurance companies got no flak from the AFL-CIO. Where was the anger at those, including Obama, who dropped official labor's chief goals, the public option and no tax on benefits? Only those who voted against the bill were chastised including one—Stephen Lynch of Massachusetts—who cited the tax on workers’ benefits as one reason to oppose the bill. Karen Ackerman, the AFL-CIO’s political director, threatened to withhold support from Dems who voted the wrong way.

Looking to the future, Trumka remained firmly in the realm of conventional wisdom. He advocated not Medicare for All as labor’s goal but “a public health insurance option.”

As the new bill fails spectacularly to fix our health care woes, pressure for the "real deal" is sure to grow. The Labor Campaign for Single Payer just concluded a spirited conference of activists intent on making Medicare for All labor's primary agenda.

Jane Slaughter is a former editor of Labor Notes and co-author of Secrets of a Successful Organizer.

Comments

AntonioL (not verified) | 03/25/10

An argument is not yet over about the health care bill of President Obama. I understand that every party is pointing their own views and opinions for the betterment of our people. I think the bottom of line of this issue for me is this, the bill that is being concise is design to address the reformation of health and as well as to address the inflation of the present times. You know, Joe Biden makes me miss Dan Quayle. Or at least think about him – Sarah Palin, too. It appears we can't get a smart vice president, actual or candidate or otherwise, no matter what we do – and it isn't as if us normal folk can get pay day loans big enough to buy the right candidates. He had to go and open up his mouth, and let the F bomb go about President Obama signing the health care bill. Although to be fair, it was a thing that was said in a moment of jubilation of sorts. It seemed to be jovial, so it isn't as if he was pulling a Rahm Emanuel.