Why Connecticut Should Publicly Fund Universal Health Insurance

Presented to the Greater Hartford Interfaith Coalition for Equity and Justice, November 12, 2007

John R. Battista, M.D., Connecticut Coalition for Universal Health Insurance

The only equitable and affordable solution to our states’ inequitable and  increasingly unaffordable health care system is to publicly fund comprehensive health insurance for all Connecticut residents which guarantees the right to the health care agreed upon by the patient and their health care practitioner.  Any attempt to improve our health care system while leaving our public-private health insurance system intact will increase costs and sustain the inequality of our health care system which allows the wealthy to pay a smaller per cent of their income for health care yet enjoy better access to health care and better health than the poor and working class.

For you and your communities to play a significant role in bringing about this solution to our health care problems the answers to three questions need to be clearly understood:  Why is publicly funded, universal health insurance the only financially viable solution to problems of our current health care system?  Why has publicly funded, universal health insurance failed to be enacted?  What needs to be done to pass publicly funded, universal health insurance in Connecticut ?

Question One: Why is publicly funded, universal health insurance the only financially viable solution to the problems of our health care system?

Problems with access and cost plague our health care system.  Most of you probably know people without health insurance, or who have high deductible health insurance, who avoid preventative health care visits and delay health care visits when they are ill because of the cost of seeking health care.  Similarly, if you know people who have publicly funded state health insurance through the Husky program, you surely know people who have difficulty accessing health care because they have difficulty finding health care providers who are willing to accept their insurance, particularly in the areas of dental care and mental health care, due to the low reimbursement rates with which this program reimburses health care providers for their services.  Furthermore, you probably know or have heard of people who have not been able to obtain the care they and their health care providers have agreed is best for them because their managed care insurance program refuses to pay for the recommended procedure or medication.  Also, those of you who minister to the seriously ill probably know people who have exhausted the limits of their health insurance and cannot afford to pay for the health care which is their only hope of remaining alive.  Surely, many of you have known people who become ill and lose their health insurance only to find they cannot afford new health insurance or find the only health insurance available to them excludes the treatment of their pre-existing conditions.

Well-intentioned attempts to rectify access problems, by subsidizing the cost of health insurance, more stringently regulating the private insurance industry, or increasing reimbursement rates, raise costs without resolving the access problems.  For example, increasing regulations on the private health insurance industry to cover a particular procedure may improve access to health care for that procedure but raises the cost of health insurance so that there is an increased number of uninsured and an increased prevalence of poorer quality health insurance. 

Only health insurance which guarantees the right to the health care agreed to by the individual and their licensed health care provider can truly resolve access problems.  However, such health insurance would be far too expensive for the average American family or employer to afford if the private health care insurance system remains intact.  On the other hand, international experience with publicly funded, universal health insurance with modest or absent co-pays has shown such systems can resolve the access problems of our health care system while lowering health care costs. 

Publicly funded, universal health insurance programs increase preventative health care visits, such as pre-natal care, immunizations and yearly physicals by removing the financial barriers to preventative care and educating the population about the importance of preventative care.  Publicly funded, universal health insurance programs increase health care visits earlier in the course of an illness when it is less costly and more effective to treat by removing the financial barriers to primary care.  As a consequence, publicly funded, universal health insurance programs decrease emergency room visits and hospitalizations caused by the lack of primary care and the failure to treat illness on an outpatient basis. 

Although it is generally acknowledged that universal health insurance with minimal or absent co-pays would resolve the access problems of our current health care system, it is not generally understood how this could be accomplished at a decreased cost.   

The United States spends about twice as much per capita on health care as other industrialized countries, all of whom have some form of publicly funded, universal health insurance.  Our high expenditures are not associated with better health care outcomes.  In fact, empirical studies rank the United States in the lower third to dead last among industrialized countries on the two internationally accepted criteria of evaluating the effectiveness of health care systems: infant mortality and life expectancy. 

In 2006, the United States reached a new low in the cost of health care insurance.  For the first time in our history it cost more for an average full time minimum wage worker to purchase health insurance for their family than he or she earns working a full-time, forty-hour job.  No wonder about 16% of our national population lacks health insurance, and two-thirds of these predominantly female people of color are employed.  Shame on this country for allowing a minimum wage which is not a livable wage.  Shame on this country for making health insurance a privilege instead of a right.  What kind of country touts itself as the beacon of equality while allowing tens of thousands of its citizens to needlessly die each year due to lack of health insurance and allowing health care expenses to be the leading cause of bankruptcy?  It is estimated that one fourth of people who have health insurance would be bankrupted by a major medical illness due to the inadequate nature of their health insurance in combination with the high cost of health care.

The high cost of health care in the United States is not simply the result of failing to insure our entire population.  Much more importantly, the high cost of health care in the United States is the result of having multiple, for-profit health insurance corporations competing to provide health insurance for our population. 

To begin with, for-profit insurance companies increase the cost of health insurance due to their higher administrative costs as well as the increased time and administrative expenses they require of health care providers.  Their higher administrative costs result from high salaries, high marketing expenses and the high cost of managing health care benefits as well as their fiduciary commitment to maximize profit for their shareholders.  As a result, for example, the cost of having for-profit, private insurance companies deliver the same services to the Medicare population as traditional Medicare is 10 to 20% more.  Furthermore, satisfaction and quality of care is poorer in the for-profit sector than in the not-for-profit sector of our health care system.

Although, legislation to reduce the administrative costs of for-profit insurance companies would slightly decrease health care costs, the only way to save the large amounts of money needed to fund comprehensive, universal health insurance without financial access barriers is to have our entire population in a single insurance program.  Fractionating our population into thousands of risk-based insurance pools with different insurance programs is the most significant reason the American health care system is so costly relative to other industrialized countries.  It is consistently estimated that placing the American population into a single insurance pool with community rating standards would save 15 to 20% of our current total health care expenditures by reducing administrative costs from their current 25% to the 5 to 10% range characteristic of single payer, universal health insurance programs. 

This massive decrease in health care costs would result from ending the costs associated with marketing and negotiating new health insurance programs, ending the costs associated with managing health care insurance benefits, and decreasing the number of workers needed to administer a single insurance program free of managed care.  In addition, such a system would save money by freeing health care providers of the administrative costs associated with billing multiple insurance companies and freeing health care providers of the time it takes to seek insurance company approvals.  Furthermore, the cost associated with having patients seek new health care providers due to becoming enrolled in a new health care insurance network would cease.     

Additional savings of about 5% of our total health care expenses would result from allowing the universal insurance agency to negotiate prescription drug prices on behalf of the population as typically occurs in other single payer, universal health insurance programs. 

Thus, universal health insurance administered by a single payer would save 15 to 25% of our total health care costs without changing anything about our health care delivery system except relieving practitioners of the need to seek insurance pre-approval and negotiating the price of prescription medications    for the insured population.  These immense savings are the reason publicly funded, universal health insurance can reduce overall costs while resolving the access problems of our current health care system.  All state and federal prospective studies, as well as the entire body of international experience, support this conclusion.  For example, a prospective study conducted for the Weicker administration showed a publicly funded, universal health insurance program for Connecticut would result in savings of about 10% of total health care expenditures despite universal access. 

In addition, publicly funded, universal health insurance also decreases long-terms costs by encouraging preventative health care and treating illnesses earlier in its course.  For example, Canada had the same cost per capita as the United States when it first enacted publicly funded health insurance thirty years ago.  Now it spends half as much per capita and has surpassed the United States in terms of longevity and infant mortality. 

Finally, and perhaps most importantly, a publicly funded, universal health insurance system would be much more equitably financed than our current health insurance system.  Our private health insurance system fractionates the population into individual and group risk pools which are charged varying rates based on their age and illness history.  As a consequence the sick and working poor pay a greater percent of their income than the wealthy and healthy.  Such an approach turns the traditional idea of health insurance on its head.  Instead of having an insurance system in which you pay when you are young and healthy to have access to health care when you are old and ill, we increasingly have a privatized insurance system which increases the cost for the old and ill, and minimizes the cost for the young, wealthy and healthy, without considering their ability to pay.  As a result, the poor and the ill are increasingly forced to go without health insurance, risking medical bankruptcy and poorer health, until they are sufficiently drained of their assets to become eligible for public health insurance, which is not only fraught with access problems, but so expensive as to threaten the financial solvency of state and federal governments. 

In the publicly financed, universal health care system we advocate, families would pay for health insurance according to their income, not their age or health care history.  All families would pay the same percent of their income for comprehensive health insurance, although the poor, disabled, elderly and veterans will pay little or nothing, as the cost of their health insurance would be covered by existing state and federal programs.  The system is affordable for everyone because the cost is equitably shared by the entire population.  Because publicly funded, universal health is affordable, it is the only financially realistic solution to the financial dead end in which our current health care system finds itself, where the cost of health care is increasingly unaffordable but there is no way to improve access without increasing its cost or increasing public subsidies. 

Our private-public system cannot utilize equitable financing because it depends on fractionating the population into risk pools.  This not only makes health insurance more expensive, but also pits the healthy and wealthy against the poor and ill, while increasing administrative costs to an obscene degree. 

These are the essential reasons our health care system is increasingly unaffordable and must be abandoned in favor of a publicly financed, universal health insurance system if its access and cost problems are to be equitably and cost-effectively resolved.

Question Two: Why Don’t We Have a Publicly Funded Universal Health Insurance System in Connecticut and the United States ?

If all experience and studies predict a publicly funded, universal health care insurance system would decrease health care costs, improve quality of care, and result in a more equitable system to pay for and distribute health care than our current system, why has it failed to be enacted in Connecticut ?

First, many politicians and a significant minority of our population find it hard to believe a publicly administered, not for profit system could be more efficient and effective than for-profit companies competing with each other, despite the vast body of evidence to the contrary.  Much of this difficulty stems from the mistaken belief health care is a commodity in a free market system subject to free market competition.  However, health care is not a free market in which people shop for health care providers and health care organizations based on cost.  Instead, people go to health care providers and health care organizations they trust or who are convenient.  Similarly, health care providers do not compete with one another on the basis of cost, but rather reputation and availability.  In fact, over 85 percent of health care fees are controlled by insurers, not providers.  In this environment not-for-profit monopolies are more efficient than competing for-profit corporations. 

Second, the assumption that a publicly funded, universal health insurance program would be administered by the government has impeded its passage.  This assumption conflicts with the widespread belief that government-administered systems are inherently bureaucratic and inefficient, however inaccurate this belief may be.  For this reason we have consistently advocated that a publicly funded, universal health insurance system for Connecticut have strict limits on administrative costs and be administered, not by state government, but by a not-for profit trust under the control of a board composed of representatives of those groups which have a vested interest in its functioning: health care providers, health care advocates, taxpayers, health care organizations and public officials.  Such a not-for-profit trust would be directly funded through the tax system independent of the state budget process.  We believe such a directly funded, non-governmentally administrative system would constitute a new approach to funding and administering public programs which would much more closely embody the principle of a government of the people, by the people and for the people. 

The third and most significant reason we do not have publicly funded universal health insurance relates to the influence of those aspects of our society who would be adversely impacted by such a change in our health care system: the health insurance industry and the pharmaceutical industry.  In fact, the health insurance industry and the pharmaceutical industry have promoted and funded claims that publicly funded, universal health insurance is anti-democratic, socialized medicine which would result in the intrusion of government into health care and massively increase taxes. 

In reality the universal health care system we envision would be more democratic not less.  Health care advocates, health care providers and taxpayers would play significant roles in determining the services and payments made by the health care insurance underwriter, something they are excluded from under our current system where decisions about payments and benefits are made by corporate executives and government administrators insulated from the people their decisions will impact. 

Similarly, there would be no government interference in health care decisions made by health practitioners under the system we advocate.  However, the intrusion of the private health insurance industry into health care decisions through managed care would be eliminated. 

Furthermore, the publicly funded, universal health insurance system we advocate is not socialized medicine.  Health care providers remain in private practice and compete with one another on the basis of competency and availability.  The health care delivery system is maintained as it is.  The only change is the way health insurance is paid for: through a tax system based on the amount people pay earn rather than through a private system based on their age and health care history. 

Although taxes would increase, health care costs would decrease.  The only people who would experience increased costs would be the wealthiest people in this country who would have to pay more for their health care by wit of paying the same percent of their income for health care as the rest of the population. 

The most significant way insurance companies and the pharmaceutical industry have hindered the passage of publicly financed, universal health insurance is by their generous contributions to the campaigns of public officials.  To the extent it takes vast sums of money to be elected, it stands to reason politicians will vote in favor of the interests of those groups that fund their ability to be elected.  This is why the public funding of elections has been considered an essential step in passing publicly funded, universal health insurance.

Connecticut does provide optional public funding for major party candidates.  Thus, most of our political candidates are potentially freed from the direct funding influence of the pharmaceutical and health insurance industries.  However, even if major party candidates choose to accept public funding, many of our currently elected officials have historic ties to the insurance industry and remain sensitive to the issue of the lost insurance jobs in Connecticut which would result from passing a publicly funded, universal health care insurance program. 

For example, when we fought to have a public hearing before the public health committee on publicly funded, universal health insurance, and had convinced the majority of members of the committee to support such a hearing, we were shocked to find that one of the co-chairs of the committee refused to put our bill on the committee’s agenda.  To make matters worse, the then speaker of the house apparently threatened to refuse to re-appoint members of the house to the health care committee who might dare to petition the bill on to the committee’s agenda.  Only at that point did we learn the house co-chair of the health committee was a lawyer for a health insurance company and the speaker of the house had major allegiances to CBIA, which sells health insurance to businesses in Connecticut . 

We are hopeful that Connecticut ’s passage of publicly funded elections will result in politicians who are more responsive to the population that elects them rather the corporations that have historically supported their campaigns and lobbied their offices.  However, should a bill for the public funding of universal health insurance be under serious consideration by our state legislature, there is every reason to believe it will be massively opposed by the insurance and pharmaceutical industries, both in the media and in the halls of the State House.  The issues of lost insurance jobs and fear of a comprehensive change in Connecticut’s health care system will undoubtedly connect with many elected officials despite the fact that the high cost of health care, the rich supply of medical infrastructure and the small number of uninsured relative to other states make Connecticut an ideal state in which to pass publicly funded, universal health insurance.  As one healthcare insurance industry spokesman put it, “This is a fight for our survival.  We will spare no expenses, and do whatever it takes to ensure our continued existence.”    

Final Question: What can you do as leaders of faith communities in Hartford to bring about the passage of a public funded, universal health insurance for all Connecticut residents?

First, you can seek to educate your faith communities by providing literature and speakers which will explain to them how such a system would work and answer their questions about it.  “Answers to Commonly Asked Questions about Publicly Funded, Universal Health Insurance” is available on the Connecticut Coalition for Universal Health Care Website, http://cthealth.server101.com.  Also, the “Connecticut Health Care Security Act” which details legislation to enact publicly funded, universal health insurance in Connecticut is also available on that website.  Members of the Connecticut Coalition are available to speak to your congregations about the case for publicly funded, universal health insurance and answer questions about it.

The next step is to make a commitment as a congregation or organization to work to pass publicly funded, universal health care insurance in Connecticut .  Take a vote of your congregation to endorse publicly funded, universal health insurance for all Connecticut residents.  Publicize your vote by sharing it with reporters and the leadership of your sect. 

Then take a third step, make a commitment of time, energy and money to advocate for the passage of publicly funded, universal health insurance for all Connecticut residents.  Select an individual or group of individuals from your congregation to lead this task.  Fund their efforts as best you can and seek funds for their work from the Connecticut Foundation for Universal Health Care.  Give them a place to work, a phone to use, a fax and copying machine to make use of, and most importantly give them your never-ended love, support and appreciation for the efforts they make on all of our behalf, and particularly on behalf of the poor and ill, who are most in need of a transformation in our health care system. 

Such a group of advocates needs to come into communion with the rest of us who are advocating for publicly funded, universal health insurance in Connecticut .  Their work will involve organizing community education forums and lobbying state legislators to support and sign on to publicly funded, universal health care legislation such as the Connecticut Health Care Security Act.  It will involve encouraging and assisting individuals to contact their legislators, speak at public hearings and ideally tell their legislators that if they don’t support such legislation not only will they not vote for them, they will recruit and support a candidate to run for office against them who will support publicly financed, universal health education.

The Connecticut Coalition for Universal Health Care and the Green Party of Connecticut are particularly interested in working with you to identify and support individuals who wish to run for state office with a platform of working to pass publicly funded, universal health care insurance legislation for Connecticut .  Because the majority of current elected officials remain vested in the public-private multi-payer health insurance system in Connecticut only extensive pressure on these officials to pass publicly funded universal health insurance --or be replaced by candidates who do-- will win the fight for equitable and just health care in Connecticut.