Lipstick on a Pig

The Failure of Obama’s Health Care Reform

Consider it a symptom of a larger disease. A fervent commitment to defend the profit margins of private industry seems to be a national religion for politicians in the United States. No matter how deeply the private sector mucks up society, some senator or representative or, if things get really out of control, president, will appear to rescue the day for the corporations all in the name of justice for the citizens of the US. Like any religion, this process has highly crafted rituals. First a confession, then march the sinners around at one hearing or another, then met out acceptable penance and then all is forgiven.

It is difficult to tell whether the House-sponsored “America’s Affordable Health Choices Act” is the penance or just straight forgiveness. The Bill purports to be the solution for America’s health care crisis. Representative Christopher Dodd went further, calling it, “The bill we all have been waiting for and fighting for, for 60 years.” Curbs on industry excesses, a public option and high-sounding rhetoric about universal care all dress up the fundamental motivation of the bill – find a way to prolong the life of an already failed private health insurance industry.

Of course, failure is a relative term. Private health insurance companies are quite efficient at completing the task they were designed to carry out, accumulating profits. In 2006, for instance, health care companies accumulated more than $10 billion in profits. Not surprisingly, they are far less able to deliver health care. About 50 million people or 16% of the population, have no health insurance, another 30 million more can be considered under-insured and about 20,000 die each year from treatable illnesses.

Americans have developed two responses to this unjust system – avoiding care and filing for bankruptcy. A recent Kaiser Family Foundation poll indicated six in ten Americans had either delayed or deferred necessary medical care in the last year. The four who do attempt to use the health care system, will likely face the prospects of high fees and, ultimately, indebtedness. The majority, some 52% by last count, of personal bankruptcy claims are, therefore, the result of debts related to health care.

The House bill does little to address the structural failures of private corporations. Instead of a single-payer plan which would address the problem of cost and coverage by eliminating private health insurers’ thereby opening access, the House bill proposes coercive mandates to herd the great mass of the uninsured toward private plans. Key to this is a focus on keeping costs low in the private plans. The problem is that there are only two ways to do this – offer high-fee, high-deductible plans or offer plans with bare-bones coverage. Both maintain high-profitability for the corporations, while fueling the logic of health care avoidance and debt accumulation.

Some of the uninsured may resist this drive into private health insurance plans designed for corporate profitability. The House, under the advice of President Obama, has therefore designed an intricate system of coercive penalties. Americans will either have to prove enough hardship to qualify for the public option or pay a 2.5% penalty on their annual income. Considering the high costs of monthly health care premiums, we can imagine that many may opt to pay the fine in order to avoid the higher costs of a private plan.

To make up the difference, the House Bill proposes the issuance of “affordability credits,” in order to, “reduce cost-sharing to levels that ensure access to care.” Where will these credits, read tax-payer money, be headed? Directly to the private health insurance industry. Here again the new logic of the Obama regime is put to work. Instead of using the state to solve social problems by nationalizing, or socializing industry, the administration chooses to toss tax-payer funds at the private sector. All the while, they employ free-market language – increased competition, market areas and individual responsibility – to cover what is essentially a transfer of public funds to large corporations. No wonder nary a word of protest has been uttered by the normally vociferous private health care industry.

As the House trots out its 1,000 page bill complete with 360 amendments from the Republicans, objections are sure to emerge. Obama and the Congress will face harsh, and not entirely unjustified, criticism from fiscally conservative Democrats and Republicans. Most will base their argument on the Congressional Budget Office estimate that the plan will cost more than $1 trillion over the next ten years. Others will play the small business card, arguing that a disproportionate burden may fall on this sector. A few right-wing libertarians will object to the coercive penalties, but this criticism might be done far more skillfully from the left. Yet, the fact remains that the institutions and the logic that fueled the health care crisis will survive. In fact, those who can claim the largest market share in the health care industry will enhance their position.

What is evident in this debate is the decomposition of the neoliberal capitalist project born in the 1990s. No longer able to peddle the gospel of unfettered markets, corporate America has returned to its origins by making a parasitical living off of state funds. If now, the public sector can no longer be automatically discredited ideologically, it will be bankrupted financially. Obama was more correct then he knew when he commented, in relation to comments made by Republican Vice-Presidential candidate Sarah Palin, that, “You can put lipstick on a pig, but it is still a pig.” Americans would do far better, in regards to the private health insurance industry, with a plate of bacon then a bill for lipstick.

Meanwhile, somewhere in the US House of Representatives there lies a 13 page bill called H.R. 676. This act would create a publicly-funded National Health Insurance Program – a single-payer system. Single-payer would guarantee full medical coverage to every person in the US and would be funded through combining the budgets of existing programs with a payroll tax shared by employers and employees and a tax on wealth. Its existence marks the urgency of the crisis; its elimination from health care reform discussions, the narrow parameters of “the possible” in Obama’s Washington. This confirms the ideas of left-wing advocates of single-payer, that only a mass social movement can make such fundamental changes as the elimination of the private health insurance industry possible. The rallying cry for such a movement might be a slogan from the Black Freedom Struggle of the 1950s and 60s – 99 and a half percent free just won’t do.

Billy Wharton is a writer, activist and co-chair of the Socialist Party USA. He can be reached at: Read other articles by Billy, or visit Billy's website.

4 comments on this article so far ...

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  1. Bemused Observer said on July 21st, 2009 at 6:45am #

    On the one side of the mouth is the expressed need to cut expenses in the medical system. On the other side is the need to maintain profits. Notice the contradiction, anyone? These people want affordable health care for the people as much as I want nuclear war.

  2. Billy Wharton said on July 21st, 2009 at 8:23am #


    I must make a bit of an amendment to my original article. It seems I missed the absolute latest information on personal bankruptcy. A reader sent a correction. I wrote that 52% of personal bankruptcies are due to health care debt. In fact, 62% are due to health care and 78% of those who filed a claim had health insurance.

  3. Sean O'Neil said on July 21st, 2009 at 2:46pm #

    Neither Barack Obama nor the US Congress will work on a nationalized (socialized) health care plan.

    Neither of them.


    Because both Obama and the US Congress are bought-and-paid-for phonies who only pretend to have average people’s interests in mind.

    I don’t care what cute acronym or compassionate-sounding title is given to Obama’s health care plan — it will be nothing more than a reshuffling of who gets the biggest chunk of the health care profit pie. In other words, it will be thematically identical to Hillary Clinton’s proposal back during the first term of Clinton/Gore.

  4. Dogwood said on July 21st, 2009 at 5:21pm #

    Join NOW!