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‘I’ll Give You Two Minutes’
State Sen. Tom Harman’s healthcare plan ignores personal bankruptcies caused by skyrocketing costs.
By Adam Saby
OC Voice Staff Writer
(Oct. 2007)
Financial planning and how to cope with personal debt was the hot and timely topic of a seminar put on by State Senator Tom Harman’s office on Sept. 20.
Following his usual practice of pre-emptive spin making, the senator was quoted about the seminar in a press release distributed prior to the seminar that referred to the event as if it had already occurred.
“Money matters such as debt, budgets, insurance, and taxes can seem dreary and overwhelming,” the press release quoted Harman as saying.
“I was pleased to bring financial experts and leaders together to help inform my constituents about steps they can take to get out of debt and set priorities to guide their financial decisions,” he declared proudlly.
But the Republican senator, who represents all of Huntington Beach and Costa Mesa, may have spoken too soon, because for all the practical advice presented in gobs of free literature distributed at the event, and by its panel of two industry representatives (an insurance salesman and a MasterCard rep), two consumer advocates and a financial planner, missing from the discussion agenda was the number one cause of 80 percent of the personal bankruptcies in Orange County—inability to pay for health care.
That frightening statistic came from panel member Michael E. Waiters, the insurance salesman from Santa Ana, who brought it up as a warning to stock up on lots of insurance, including for long-term care and disability because (if the insurance industry has its way) “the government is not going to take care of you.”
In fact, he warned, bills are being pushed in Washington right now that would take long term care out of Medicare and Social Security. So make sure you have your insurance policies all in order, because only corporations will take care of you, he seemed to say.
Bankruptcy and Death
But insurance companies aren’t doing such a great job of caring for their constituents either, according to a 2005 Harvard University study, which says 2 million Americans went bankrupt due to health care costs—and most of them had health insurance.
But there’s an even higher price to pay than bankruptcy for lack of affordable health insurance. The National Science Academy’s Institute of Medicine estimates that 18,000 adults die needlessly each year in America because of lack of health care coverage, and 20 percent of the state’s residents lack health insurance, according to the United Health Foundation (citing the U.S. Census Bureau).
The World Health Organization’s (W.H.O.) “System Performance Report for the year 2000 ranked the U.S. at 37 in health care among the world’s nations. France’s health care system was ranked first, Canada 30th.
According to the C.I.A., the life expectancy of Americans from birth is 78 years compared to 80.9 for France and 80.3 for Canada, while the infant mortality rate for the U.S.A. is 6.37 deaths per thousand compared to 3.41 for France and 4.63 for Canada.
Americans spend $6,102 per capita on health care, compared to $3,159 for the French and $3,165 for Canadians, according to the Organization for Economic Co-operation and Development, a government information exchange organization that consists of 30 “free-market” member countries.
Health insurance premiums continue to spiral upward, at twice the rate of inflation in 2005, according to the non-profit and non-partisan National Coalition on Health Care, for a yearly premium of $4,220 for single person coverage and $11,500 for a family of four.
The underlying cause of America’s high health care premiums, according to the W.H.O., is “mainly due to the extensive [corporate] bureaucracy required to assess risk, rate premiums, design benefit packages and review, pay or review claims.”
Financial Solutions
Roughly 20-30 percent of all health insurance premiums in California are spent on shareholder dividends, executive reimbursement and advertising for health insurance companies (i.e., money that is “lost” on increasing profits for insurance companies), according to OneCareNow (OCN), a grassroots statewide health reform group that supports a “single-payer” solution to California’s health care crisis.
That’s also the solution that Huntington Beach resident, musician and activist Vern Nelson would like Senator Harman and other state representatives to support. Specifically, Nelson supports State Senator Sheila Kuehl’s (D-Santa Monica) Senate Bill (SB) 840. It passed the legislature but awaits Gov. Arnold Schwarzenegger’s likely veto. It would create the first ever all-inclusive single-payer health care system in California.
Nelson is currently the director of the Orange County chapter of OCN which he helped grow to 700 members in the past several years. He and other members participate in health care seminars and speak before city councils about health care and the benefits of Kuehl’s bill.
Under Kuehl’s proposed system, one party, the government, would pay for all medical expenses to provide for complete coverage for all California residents, regardless of medical pre-condition, employment or immigration status.
There would be an annual premium, but no out of pocket costs for health care patients; no co-pays, no deductibles, no pre-conditions and—no medical bankruptcies.
Since the state would be the only buyer of medical services and drugs in a single-payer system, medical insurance companies and their behemoth corporate bureaucracy would be virtually eliminated.
By eliminating the health insurance companies, SB 840 proponents say, the competition would be between the direct healthcare providers, based on the quality of care they offer rather than the race to the bottom line that exists now.
No longer burdened by cumbersome HMO’s that restrict health care choices, Californians would be given the freedom to choose their own health care providers with all services and medications paid for.
Although the annual premiums—to be paid from employee and employer payroll taxes—have yet to be precisely determined, costs would be lowered by dividing the premium payments among a single and much larger pool of insured members—about 37 million Californians—instead of multiple smaller buying pools. The state’s immense buying power when making bulk purchases of drugs and medical equipment would also help keep costs to a minimum.
Like the French and Canadian citizens who have their own form of single-payer health care, Californians would save a lot of money--$8 billion according to a 2005 study by the Lewin Group, an independent research firm with 18 years of experience in healthcare cost analysis.
All that might seem like valuable information to any of Harman’s constituents who are interested in financial planning and preventing personal bankruptcy, but the senator will probably not be sharing that information with them anytime soon.
Sen. Harman’s Plan
Ignoring the personal financial bankruptcies caused by the current for-profit health care system, Harman has ranted in canned press releases against the separate health reform plans proposed by Assembly Speaker Fabian Núñez and Kuehl, while reaping praise on the “free market and competition [that] created the best healthcare in the world.”
Harman criticized Núñez and Kuehl’s health care proposals as “socialized medicine to all, regardless of citizenship” that would “strip away personal choice” and called single-payer health care “a failure in Canada, in France and several other countries,” without citing specific evidence to back up his claims.
(Nelson and other SB 840 advocates are also opposed to the Núñez multi-payer plan because it “continues to waste billions of dollars on the private insurance companies, [and] leaves millions of Californians uninsured,” while placing to high a financial burden on small businesses).
In Harman’s view, only “a reduction in regulations and an increase in competition will help bring costs down.”
Harman has introduced a bill (SB 199) that would offer corporate and personal income tax breaks of 15 percent to employers of up to 250 workers who put money into a health savings account that would be used to purchase government approved health insurance with lower premiums and sky-high high deductibles. The health savings account would be a form of government subsidy for the private health insurance industry.
Harman’s bill, SB 199, has no chance of passing in the Democratic Party controlled legislature.
Harman refuses to answer Nelson’s repeated calls in the local press and through direct communication, including a letter signed by 162 of Harman’s constituents, according to Nelson, to sponsor or participate in a public town meeting “featuring an honest debate on this issue with all sides presented.”
‘I’ll give you 2 minutes’
Harman apparently wasn’t very interested in speaking to the OC Voice about health care either. After our repeated efforts to contact Harman for a phone interview through his office staff were rebuffed, OC Voice reporter Adam Saby finally caught up with Harman at the end of the Sept. 20 financial services seminar. “I’ll give you two minutes,” Harman said.
Harman reiterated what he had already written in press releases about single-payer health care and his plan to subsidize California’s health insurance industry.
But when asked how he could remain neutral in the healthcare debate when he received tens of thousands of dollars in campaign contributions from health care industry giants like Blue Cross of California, AETNA, Allegran Inc., Glaxosmithkline and Pfizer to name a few (Nelson says $250,000, but the total depends on how you define a member of the health care industry), Harman answered, “I don’t have any comment on that, sir,” and quickly walked out of the room.
OC Voice Editor John Earl also contributed to this story.
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