The New Bailout: Individual Health Insurance Mandates and Greater Personal Debt

Behind the escalating debate on the health care between Senators Hillary Clinton and Barack Obama on individual mandate -- she's for it, he's against it -- is a critical policy battle that not only cuts across health care reform but also the neo-liberal privatization dreams, the home mortgage crisis, and the recession that is no longer looming, it's here.

Sound far-fetched? Take a closer look, starting with the millions of Americans staring at the loss of their homes due to the sub-prime loan debacle. It's not a loan or a mortgage crisis for those families; it's a debt crisis being forced upon them by the banks, hedge funds, and insurers who are desperate to shift their own mammoth debt onto someone else.

Banking, other financial institutions, insurance and real estate which make up the finance sector, now account for about half of U.S. corporate profits. And, they are in trouble with more than $2.5 trillion in outstanding consumer credit, $800 billion of that in credit card debt, and another $10.1 trillion in domestic mortgage debt.

Being thrifty won't solve that problem. The financial planners have identified two lucrative pots of money. Trading carbon credits for industries and employers that want to brand themselves as green while continuing to pollute. And, making a killing in health care, currently 16 percent of our national economic pie and rapidly growing.

The banks are already into health care in a big way, serving as a repository for health savings accounts and other tax credit schemes so beloved by the Bush administration and the Republican presidential candidates. But the financiers would like more.

Enter the neo-liberal think tanks and policy wonks and plans they hawk to expand the reach of the market, especially the financial market, in health care. Central to that approach is shotgun insurance, forcing everyone not currently covered to buy health insurance policies.

Compelling people to buy insurance, however, is not the easiest sell. Big insurers and HMOs have a well deserved bad reputation for heartless denials of care - that's how they make money. And, it's pricey. Premiums the past decade have gone up 87 percent, not to mention the ever climbing bills for deductibles, co-pays, and a host of other transaction fees.

The finance industry is over the moon with this scheme.

For insurers, it means millions of new customers marched into their offices with the force of law. With no controls on costs, many consumers will just add on more debt. That's a boon for the credit card companies and other financial institutions, but a heavy new burden on many of the same people now losing their homes or struggling with other financial hardship.

Moreover, it doesn't work. The carrot is public subsidies for those least able to pay, but that approach has noticeable flaws, best evidenced in Massachusetts, the individual mandate pioneer and model.

As a result of the state's failure to control premium hikes, costs of the subsidized program are projected to double over the next three years to $1.35 billion, the Boston Globe reported February 6, and Massachusetts is debating whether to slash the health services offered through the subsidized plans or cut payments to doctors and hospitals.

To shroud the colossal problems and the real story of who actually makes out like bandits under this scheme, the proponents, including some liberal policy experts, have dressed it up with poll-tested rhetoric that mandatory insurance is "universal health care."

But "having" insurance is not the same as being able to use it. You're only being mandated to purchase the premiums; they're not mandating the insurance companies to make sure you get the care you need. Nor does "having" insurance protect you from financial ruin.

It accelerates the dismantling of group insurance plans with individuals forced to go it alone in the individual market, and institutionalizes risk and cost shifting on to the backs of individuals and families.

It distorts the role of government, which should be to protect people, not act as an insurance agent.

Finally, by expanding and entrenching the iron grip of the private insurance industry, it promotes the further privatization of health care, yet another crucial linchpin of the neo-liberal agenda.

Our health should not be a commodity, traded on the market like pork bellies or sold off to some hedge fund overseas to collect on medical bills we can not pay.

There's only one way to achieve genuine universal health care, the approach taken by every other industrialized country with a national health care or single payer system.

In the U.S. that would look a lot like an expanded and improved Medicare for all. With guaranteed health care, not mandated insurance profits, and insurance companies out of the way. Surely, Americans deserve no less.