This is the third of four posts on the health care issue. For an overview of the various posts click here.
Supporters of single payer health insurance have been arguing that enacting RxPA will delay the enactment of single payer health insurance in Pennsylvania. Since I think that single payer health insurance is a good idea and most likely to be enacted at the federal level, I’m not so concerned about this. But I do want to respond to one of the arguments that single payer advocates have been making and then show how we might move from RxPA to single payer.
Does RxPA Empowers Insurance Companies? No
One of the great myths about RxPA that is being spread by supporters of single payer is that “expands the role for health insurance companies.” Nothing could be farther from the truth.
CAP, the part of the RxPA that insures the presently uninsured is a largely state financed program. Insurance under that program will, as I have explained before, be paid for by the state, by employers and by the employed. A large share of the program is subsidized by the state. Insurance companies will play an administrative role in the program. But they will not be allowed to deny coverage to anyone who meets the criteria set by the state. They will not set rates for either employers or employees. They will not determine what is covered and what is not by CAP. They will simply carry out the administrative function of enrolling people and making payments to medical providers. And they will submit competitive bids to the state to obtain this business. Thus they will have no capacity to do what so many insurance companies do today—maximize their profits by cherry picking the customers they insure and minimizing the medical care they provide. They will not, in fact, really be in the insurance business but in the business of providing administrative services to the Commonwealth of PA.
In addition, as I have pointed out, RxPA introduces a number of new regulations on insurance providers, especially in their dealings with small businesses, where insurance companies are most likely to engage in practices that undermine health care. Insurance rates will be regulated by the Insurance Commissioner. And demographic rating will be prohibited.
American History, Incremental Reform and Single Payer
Many of the single payer advocates argue that any success in expanding health care will block single payer in the future. They are, however, misreading the history of progressive reform in this country. It has, with almost no exception, always been incremental. When Social Security was enacted, it covered very few employees and provided very low benefits. Gradually both were expanded. In American politics, we first enact a social welfare program and show politicians that it is possible to overcome the interests of those who oppose and survive politically. Then we show the people the benefits of the program and those who are not served by it demand that it be expanded. And, in the meantime, a government agency is created to carry out the program and that agency, in its own interest, seeks further expansion and can mobilize its clients and its providers to bring political pressure to bear in support of such expansion. The academic literature on social welfare policy—works mostly written by leftists, by the way—tells is story over and over.
The trick is to develop enact incremental public policies that create their own pressure for expansion. RxPA does that. It is a reform that can lead to more.
RxPA as a First Step
We supporters of RxPA believe that we can gain support from businesses that already provide insurance for their own employees—and from unions that are a little dubious about the proposal—by emphasizing the aspects of the plan that will reduce inflation in health care costs. This is critically important to many businesses and to all labor unions. Labor leaders continually say that they are tired of beginning every negotiation with complaints by employers about the cost of health. They want to secure better wages, not fight to hold on to the good health insurance won in previous negotiations.
RxPA helps these businesses and unions by a variety of proposals that keep health care costs down and by forcing businesses that do not provide health insurance either to do so or pay a 3% fair share assessment. That will level the playing field between businesses that provide health insurance and those that do not. And it will thus help the vast majority of businesses in the Commonwealth.
But it won’t create a perfectly level playing field because businesses that get health insurance under CAP will receive a subsidy that businesses with their own insurance do not have. The obvious solution is simply to expand CAP by allowing more employers to buy into it. Even if they pay for CAP at cost—without a subsidy—they are likely to find that their costs are reduced because a program like CAP that insures a significant percentage of Pennsylvanians has more bargaining power with health care providers and can spread administrative costs over a large number of people insured—just as supporter of single payer would expect.
Initially CAP will not allow businesses that already provide insurance to drop that insurance and enroll in CAP. And it will not allow businesses with employees who have an average wage higher than the state average to take part in CAP at all. However, as the advantages of a large, state funded insurance program become evident, we can expect them to lobby for inclusion in the program.
At the same time, individuals who are enrolled in CAP will seek to reduce their co-payments and expand their coverage, just as social security recipients demanded increase benefits over the years. The larger number of people insured under CAP, the more pressure they can exert on Harrisburg.
So I think we can expect that, once RxPA is enacted, pressure will come from two directions to expand the number of businesses and individuals who can enroll under CAP and to expand coverage and reduce co-payments under CAP. And state funding for the program will increase.
Gradually, in other words, CAP will expand a larger and larger number of Pennsylvanians. And we will move slowly but surely to single payer, tax supported health insurance.
Single Payer Isn’t the Messiah of Health Care Reform
I’ve argued for an incremental approach to improving health insurance. And that is anathema to many supporters of single payer. But I should point out that Health Care for All is not the final answer either. Its supporters have already stripped out the ambitious medical liability proposals included in the initial bill. And even if the bill were to pass in unadulterated form, there are undoubtedly going to be problems in the future that we progressives are going to have to address.
Progressive politics is, as my favorite joke puts it, just like waiting for the messiah. It is steady work. The supporters of single payer, however, seem to think that if we have enough faith, the messiah of health insurance reform is actually going to pay us a visit in Pennsylvania this year.
The Political Logic of Acting Now
So, one way or another, we are going to do incremental politics for a long time. Given that, there is a powerful political logic to moving a bill through the General Assembly—or at least as far as we can go through the General Assembly—this year.
We are heading into a critical election in our history. Right now, it looks like Democrats have an edge in the Presidential race, are likely to pick up perhaps as many as five or six Senate seats and will also pick up House seats. In Pennsylvania, we have to hold onto the House seats we won two years ago and try to win another one or two seats. And much the same is true in the State House, where we have a bare majority now.
The Health Care campaign we should all be involved in now is critical to our election hopes for next year. Health care is a winning issue for Democrats. The more we heighten attention to that issue, the more likely we are to gain votes in November 08.
And that is why supporting RxPA is so critical. It has a good chance to pass in the State House, although it will undoubtedly be close. A bill that has a chance to win makes it easier for us to mobilize people than one that has no chance to win—and that will get little or no publicity as a result. And a tough but winnable contest is best of all for securing the public attention we need. Moreover, in so far as State House politics goes, we want to force Republicans to choose between their extreme anti-tax ideologies and the desire of their constituents for health insurance reform—a desire we hope to stoke throughout the year. We want to make Republicans own up to their opposition to quality, affordable health care for all. And we want individual members of the State House to go on record.
If we win in the House then we just bang on the doors of the Senate and force make the 30 Senate Republicans to make the same choice.
If we bring pressure to bear on a difficult but winnable health insurance plan, we have a chance of insuring hundreds of thousands of Pennsylvanians who do not know have health insurance. And to do that in a competitive and large state will create momentum for health insurance reform nationally. And, whether win or lose this year, we will have gone a long way to raising the importance of the health care issue in the minds of Pennsylvanians and Americans generally.
So, for all these reasons, I hope those of you who do not have the single payer in pay faith will work for a health insurance plan, RxPA that can win this year and can set the stage for more dramatic reform at the federal level soon.