President Obama is coming to San Francisco tonight for a Democratic fundraiser. He owes the San Franciscans he will meet, in the city that has been the epicenter of progressive politics in America, some honest answers about how his health care plan lives up to the progressive legacy.
This week the powerful Senate Finance Committee has withered the president's health reform ambitions to a mandate for individuals to show proof of a private health insurance policy. Neither of the traditional twin demands of progressives survived: a public health care option to the private market or a strong employer mandate to pay for employees' insurance.
Government subsidies for the poor will help 29 million of the about 54 million uninsured Americans get health insurance policies by 2019. But families of four making over $88,200 will be taxed if they don't show proof of a private health insurance policy, which on average costs $13,000 per year for a family of four.
Sure every American will have access to an insurance policy because there will be no preexisting condition limitation, but they will also have a duty to buy one. Insurers will have no duty to hold down their prices or profits.
Obama campaigned against mandatory health insurance under the premise that the problem isn't that people don't want to buy insurance, it's that they cannot afford it. Yet nothing in the Senate Finance Committee plan makes health insurance more affordable.
Drug companies don't have to reduce their prescription drug prices after the industry lent its support and more than $100 million in advertising dollars to President Obama's efforts. Doctors, hospitals and insurers have no limits on their price gouging. Fairer insurance rules - like elimination of prices linked to medical condition and limits on out of pocket costs to individuals - will help, but not if Americans have to buy an insurance policy they cannot afford in the first place.
Here are three questions for the president that go to the heart of whether Obama will meet progressives halfway before mandatory health insurance takes effect in 2013.
Will the President support a single payer option for the states?
Congress will need to grant any state a waiver to develop a single payer health care system like other industrial nations. While the votes may not be there in Congress for such a system, California's ballot measure process would allow the people to enact a single payer system if health reform legislation gives automatic permission to states that approve such systems. Representative Dennis Kucinch is said to be proposing such an amendment. Will the president support it and lobby for it?
Does Obama support strict health insurance premium regulation like California has for its property casualty industry?
Nearly twenty-one years ago Californians revolted against mandatory auto insurance laws at the ballot by enacting the toughest property casualty premium regulation in America, Proposition 103 . The law required auto insurance companies to seek permission through an elected insurance commissioner prior to raising premiums. The ballot measure also allowed members of the public to challenge unnecessary premium hikes, a so-called intervenor system similar to that in place in many public utility commissions.
The Consumer Federation of American reported in 2008 that Proposition 103 had saved Californians $61.8 billion on their auto insurance alone. That doesn't mean auto insurers aren't prospering. California is the America's fourth most competitive insurance market, while completely unregulated Illinois, home of Allstate, ranks 44th. Fewer California drivers are thrown into high-risk pools and insurers' average profit of 13.9% in the state from 1989 to 2005 is double the national level of 6.5%. The law regulated all major lines of insurance, except for health and workers compensation, which are the only two consistently dysfunctional insurance markets in California.
The president should demand a floor on health insurance premium regulation at the state level to make sure people can afford the product they are being required by the government to buy.
Will the president close the legal loophole that denies 132 million Americans with health insurance through private employers the ability to hold insurers accountable in court?
A recently dismissed California case involving the death of a teenager after a denial of liver transplant by Cigna has highlighted the need for greater legal protections for consumers. Seventeen year old Nataline Sarkisyan died after the denial of the transplant but a loophole in the law prevents her family from taking the insurer to court over the death since the insurance was provided through a private employer. Nataline's family was only allowed to refile a lawsuit for emotional distress because an insurance executive made an obscene gesture to the family at a rally outside of CIGNA's headquarters.
132 million Americans have no remedy if an insurer's denial kills their loved one when the coverage is provided through private insurance. This is due to an errant Supreme Court ruling on the Employee Retirement Income Security Act or ERISA. The lack of accountability allows HMOs and insurance companies to deny access to care without fear of reprisal.
"I want to get rid of this ERISA law," Hilda Sarkisyan, Natline's mom, told the Los Angeles Times, "and replace it with Nataline's law." If you can sue an insurance executive if he flips you the bird, you should be able to sue a health insurer if the company kills a loved one. Obama should call explicitly for this change.