Congress on a Path to Transfer Hundreds of Billions in Tax Dollars to the Insurance Industry While Calling it Health Care Reform

Thursday, as Senator Tom Harkin (D-IO) left the health care hearing room he leaned over to me and said:

I used to sell insurance. The basic rule is the larger the pool the less expensive the health care. Today we have 1,300 separate pools – separate health care plans – and that is why health care is so expensive; 700 pools would be more efficient and less expensive and one pool would be the least expensive. That’s why single payer is the answer.

Nothing like common sense.

But, common sense was not on display in the Senate yesterday. Instead, the senate is seeking a path to the goal of universal coverage by protecting the least efficient model – the for-profit insurance industry that through waste, fraud, abuse and bureaucracy eats up 31% the cost of health care.

Chris Dodd (D-CT) who chaired the hearing, standing in for the ailing Ted Kennedy, has received $2.1 million from insurance industry throughout his career, another $547,000 from the pharmaceutical industry, and $467,000 from health care professionals. Dodd opened the hearing stating the stark facts:

We spend more than $2 trillion on health care every year- more than 18 percent of our GDP. By 2040, 34 cents of every dollar we spend could be on healthcare. That is not simply unacceptable – it’s unsustainable. Premiums and out-of-pocket costs for individuals and families alike continue to skyrocket.

It was evident, throughout the day that money was on the mind of the senators. But, they could not look into the face of the obviously most efficient path, single payer, instead they were going through contortions to protect their benefactors from the insurance industry.

The senators and witnesses showed there is a lot of division over financing health care and no easy solution – so long as the first goal is to protect the insurance industry. Business groups wanted to tax employee benefits not take away the business tax credit for companies that provide health care. These are the only two big pots of money the senate sees. There was also talk about making Americans healthier to save money, certainly a good goal. But, Sen. McCain (R-AZ), probably correctly if rudely, mocked witnesses who said health care could be paid for by doing away with inefficiencies and wellness programs. McCain favors taxing health care benefits.

Of course, both the business tax credit and not taxing health benefits are two reasons the health insurance industry is able to acquire massive wealth. These are annual, indirect taxpayer giveaways to the insurance industry that demonstrate how government is already paying for health care. Taxpayers are just doing so in the most inefficient way. Rather than actually using tax dollars to pay for health care, they are used to pay for insurance and all the profits and waste that goes with it.

Senator Bernie Sanders (I-VT), the sponsor of S.703, the single payer bill in the Senate, finally got his chance to speak and railed against the waste of the health insurance model, criticized their massive profits and emphasized that health care was a human right. He pointed his question to the lone witness advocating for single payer of the dozen testifying, Dr. Margaret Flowers of Physicians for National Health Plan.

Flowers, who had been arrested just six weeks ago for protesting the exclusion of single payer from discussions in the Senate Finance Committee, went into a long list of reasons why the multi-payer system is so expensive – inefficiencies built into the system, insurance companies making massive profits while people died from lack of health care access, hospitals needing massive billing departments creating bigger administrative staff than nursing staff, doctors spending 20% of their overhead on dealing with the insurance industry, fee for service payments that lead to unecessary treatments and expensive, often unneeded tests, malpractice litigation because patients do not have access to health care to bad health care outcomes. . .

Flowers was still going strong, the list was incomplete, when Sanders cut her off, saying I only have a few minutes for questioning.

Sitting next to Flowers was the CEO of Aetna Insurance, Ronald Williams. The senators fawned over him, except for Sanders who pointed out Medicare was more popular that Aetna. Williams makes anywhere from $13 million annually in salary and stock according to Insurance Industry News to $30.86 million annually according to Forbes. Insurance Industry News reports that if Aetna grows by 15% by 2010 Williams gets an addition $4.3 million. Is he not the perfect example of what is wrong with health care in America? Profits are the top priority of corporate interests, and usually short term profits. Should the insurance industry be striving to grow so rapidly when they already gobble up too many health care dollars?

The senate also struggled with how to make sure everyone is covered with health insurance. Again the divisions were obvious. Business groups said there should not be an employer mandate, but rather an individual mandate. Unions said there should be an employer mandate not an individual mandate. Big businesses said there should be no subsidy for small businesses that would be unfair to big businesses. Republicans scoffed at the idea of expanding Medicaid to more of the working poor – too expensive, unaffordable, they pointed out. The public insurance option was described as unfair to the insurance industry and too expensive to implement. The Democrats squirmed uncomfortably at choices that they know will upset some powerful interest group.

What a mess! The effort to protect the insurance industry at all costs is making real health care reform impossible. Maybe, because the Democrats want to do something, anything, so badly they will find a way to pass something, but if they do it will not work, it will be very costly and the group that will benefit most clearly will be the health insurance industry which will reap hundreds of billions in corporate welfare every year from the deform of health care in America. Of course, incumbents who support it will benefit with campaign donations from the industry. Pay to play politics on display in America.

Margaret Flowers, MD was the first witness to testify at the senate hearing on June 12. Her comments focused on health care as a human right. She pointed out how FDR was the first to try and put in place a social security system that included a single payer health care system. And, how years of trying the “uniquely American approach” of the market solution – for-profit health care – had failed the country and put health care on a path to government deficit with health care costs already a cause in two-thirds of bankruptcies. She urged the senate to not tinker with a broken system but instead to take a new path and adopt a national health plan with single payer as the financing system.

Sadly, there were four doctors on the panel and only one, Flowers, who spoke of health care as a human right. Perhaps the AMA was the most despicable. Not only did they oppose single payer – something supported by 60% of doctors according to a survey of the AMA data base – but they even opposed the weak public insurance option. The AMA spokesperson said they would only support market approaches. No wonder the AMA is shrinking rapidly. While not long ago it represented 70% of American doctors, they are now down to only 30%. At this hearing, their callous disregard of the needs of patients and their disregard of the opinions of doctors showed why they are a shell of an organization.

Sen. Sanders pointed out the historic breakthrough of having the first witness for single payer being allowed to testify as part of the health care reform discussion. The audience began to applaud, Sanders warned “be careful, you might get arrested.”

The day before this hearing a House subcommittee held a session on single payer health care. One witness Dr. Walter Tsou, a University of Pennsylvania professor, former health commissioner and an adviser to Physicians for a National Health Program responded to the claim that single payer was too radical saying “Our most famous radical document begins with the words, ‘We the People.’ Not ‘We the Insurers,'” he said. “It is time for our own generation’s revolution.”

And, it will take the people speaking out and getting active to make real health care reform possible. If you don’t want to see another massive transfer of wealth to the insurance industry while Americans continue to lack health care, you need to take action. Tell your representatives that you want a national health plan funded by a single payer system. The insurers are working hard, the American people have to work harder. The time is now.

You can take action by clicking here.

Kevin Zeese co-directs Popular Resistance and is on the coordinating council for the Maryland Green Party. Read other articles by Kevin, or visit Kevin's website.

5 comments on this article so far ...

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  1. HR said on June 13th, 2009 at 11:43am #

    Weird signals coming from the so-called left. Last night on Moyers, the only program I — in my admittedly limited viewing of the PBS/NPR consortium for preserving the status quo — have seen on the Propaganda Broadcasting System that even has addressed single payer, Bob Reich, who usually is right on the money, contradicted himself on health care politics. He first asserted that in order to get our elected “representatives” to be more open to single payer, people need to pressure them. A few minutes later, he pointed out that the lobbying empire trumps public opinion, no matter how much it favors single payer … or any other issue. Geez, Bob, what did you really mean? Give up completely?

  2. Bert. said on June 13th, 2009 at 9:07pm #

    There will be no change in any fondamental bases of the society unless the people realize what is happening behind the curtain. A nice article:

  3. Michael Dawson said on June 13th, 2009 at 10:51pm #

    HR, Robert Reich is extremely over-rated.

    Alas, Nancy Pelosi has already told us “it’s not going to be a single payer,” and the commercial media is never going to explain the basic facts to the public, so an uprising seems unlikely.

  4. HR said on June 14th, 2009 at 12:36pm #

    Michael Dawson, perhaps, but Reich’s presentations on UCTV and other non-corporate (semicorporate) outlets have been accurate, logical and quite convincing to me.

    As far as blaming the corporate media goes, that is such a dead issue, a total copout in my opinion. For nearly 15 years access to alternative media has been readily available. The truth is, the public chooses, on its own, to live in self-imposed ignorance, preferring to pledge allegiance and cheer on the troops than to think. Before the Internet, it was a little harder to be more informed, but even then there were alternative weeklies or dailies, if a person really gave a damn. Most humans, a herding species, seek leadership and will turn against the status quo only when enough of them have had their lives so utterly destroyed that no other option is available. We are rapidly approaching that point.

  5. Xavier said on June 15th, 2009 at 2:05am #

    read at:

    “[Centrist Democratic Sen. Ben Nelson (Neb.)] argues a public health insurance plan would ruin employer-sponsored private health insurance plans. He told CQ the inclusion of a public plan in a healthcare reform bill was a DEAL-BREAKER for him.”


    at 8:01, Baucus says: “I think everything’s going to stay on the table, but …big portions will be modified…and sculpted…one example is the public option…you know, that’s…that’s a hot button…and I, I do suspect that a version will be there …by saying that…I don’t want to frighten people…PARTICULARLY ON THE INDUSTRY SIDE…will say “oh, oh, there they go, Baucus’ said ‘public options’ …you know…THE DEAL’S OFF.”..I don’t want to…all I’m saying is: there’s ways to skin a cat, there are ways to find a solution, there’s ways, I think, to do this, ultimately in a way…that’s acceptable”


    @Michael Dawson said on June 13th, 2009 at 10:51pm: “Nancy Pelosi has already told us “it’s not going to be a single payer,””

    Nancy of “Impeachment is off the table” infamy? This language reflects the incredible arrogance of politicians who think their job is to DICTATE what we should have, instead of implementing what we want.