Health Care vs. Unhealthy Beverages:
Pay less now -- or more later
Maine's health care system always seems to be a hot
topic. Maine is often lauded for having a small number of uninsured relative to other states. We are the only
state in the nation to see its rate of uninsured go down over a five year period ending in 2006. We have done an especially
good job at covering our children. In fact, the non-partisan Commonwealth Fund rated Maine the third best state in the
country for children's health care coverage and access.
Usually, the debate on health care policy in Maine revolves
around how health care coverage should be paid for and by whom. Rarely, if ever, do those arguing against any further
commitment from the State or Federal government to pay for this coverage admit that they are perfectly fine with the idea
of those not being able to afford coverage simply not receiving the health care they need. Rarely, if ever, do they
mention that the entire system pays more when thousands of Mainers must still go to the emergency room for health care --
turning what could have been pennies for prevention, into thousands of dollars for long-term treatment of chronic illness.
Among health care experts, there is no real disagreement
that the United States health care system is broken. Most businesses moving overseas cite rising health care costs as
a main consideration. More and more of the burden is being shifted to employees, and fewer businesses or individuals
can afford to cover health insurance at all. This is especially true for small, Maine-owned businesses that lack the
buying power of big business.
Health care expenses are now the number one cause of bankruptcy.
Those of us fortunate enough to be healthy and ensured by a large-group employer have been somewhat insulated from the problem,
but even we are beginning to see direct as well as indirect impacts of these rising costs on our wallets and on our economy.
Rising hospital costs are the number one reason health
insurance is so expensive in the U.S. This is why I was proud to cosponsor LD 1849, "An Act to Protect Consumers from
Rising Health Care Costs." This bill, which passed overwhelmingly in the Maine Legislature in 2007, with only a handful
of Republican House members bucking their own leadership to vote against it, will help Maine to begin controlling cost drivers,
and cost-shifters in the Maine health care system. The bill expands the duties of the Advisory Council on Health Systems
Development, to do comprehensive and in-depth research about these cost drivers and to make recommendations to the Legislature
targeting specific reductions that decrease cost and increase access to health care services. But even with this help,
health care costs in Maine will continue to spiral until clear federal action is taken.
One key cost-shifter in the U.S. health care system
– and to a lesser extent, Maine's – is bad debt and charity care. The cost of bad debt and charity care has become staggering.
It affects us all, and is directly due to the rising number of Americans (about 49 million in 2005) who are uninsured.
Those who do not have insurance – or who have high co-pays
or deductibles – typically postpone doctor's visits, hoping things like mild heartburn or dizzy spells will go away on their
own. This often results in missed prevention or early detection opportunities. A mild, preventable heart problem
easily becomes a massive coronary. Mild hypoglycemia becomes full-blown diabetes. Chronic, avoidable conditions
like these often result in a lifetime inability to work, staggering medical costs, and a complete default on payments.
To recover costs, hospitals fold this bad debt and
charity care into their rates for all other payors. Insurance companies, who are generally the only ones actually able
to pay, recover these costs by inflating premiums. The more people insured with quality health care coverage, the less
bad debt and charity care must be absorbed by hospitals and passed on to the rest of us.
This is why Dirigo has been funded by a Savings Offset
Payment (SOP) in recent years. The SOP represents a percentage of the money saved by insurers due to more people in
Maine being insured through Dirigo, and costs the Dirigo agency has helped health providers to minimize though voluntary spending
caps and best practices.
A recent change in Dirigo to promote market reform and
provide more stable funding for the program repealed the SOP and replaced it with a 1.8% surcharge on paid hospital claims,
and a tax that will cost 3-cents on a 12 oz can of beer, 6-cents per bottle of wine and 7-cents per 20oz bottle of soda.
The 1.8% surcharge is less than the SOP ever was and is a far more predictable cost for the insurers.
I supported this recent change in funding Dirigo, both
because it keeps 18,000 Mainers – including more than 700 small businesses – insured, and because it reduces your net health
insurance costs once the avoided bad debt and charity costs are factored in.
With the news in July that the effort to repeal these taxes has received
enough valid signatures to force a referendum on the issue in November, the Savings Offset Payment (SOP) is back in place
-- at least until the election.
The beverage industry hired signature gatherers from
out of state who received $2 for every signature they talked someone into, to try and repeal these new funding mechanisms
by referendum. For Coca Cola in particular, there is apparently a great deal of desire to prevent their products from
becoming associated with the obesity epidemic. To date, beverage companies have raised $15 to every $1 raised by health
care proponents for the fall referendum.
I also supported the change in the Dirigo law because it
included market reforms that would lead to a 40% reduction in private health insurance rates and bring more young and healthy
people into the health insurance market.
People opposed to health insurance market reforms simply
because they come from Democrats, or because they include any State or Federal funds whatsoever, fail to mention that the
lower premiums they promise through removed regulations and reduced government subsidies would not cover many, if not most,
of the preventive or long-term health care needs of Mainers. Cheap insurance is great -- but not if it doesn't help
you when you get sick.
Unfortunately, many plans on today's market are just this
sort of product. Strapped for cash, many hard working Americans like you and me are lured into these plans. Once
sick, we find that most of our health care costs are not covered-- requiring tens or even hundreds of thousands in additional
costs, on top of the premium we have already paid to the private insurer.
That's great for the private insurers' profits, but
does nothing to make actual health care more affordable, people more healthy, or small business people more economically stable.
Affordable health care is a crucial element of a strong
economy. Cheap, ineffectual health insurance is not.
My preference would be to start from scratch, and to
design a more preventive, universal, and affordable system of health care. Unfortunately, there are a number of powerful
interests who are presently very invested in the status quo. In addition, federal monies and regulations make it very
difficult for states to enact significant reforms on their own. The best answer to our national health care crisis is
significant, national reforms which obviate the need for stopgap programs at the state level.
Our choice in Maine is to pay less now for quality
affordable health care, or risk paying much more later.
