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Single-Payer: Good for Business | The Nation

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Single-Payer: Good for Business

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Business leaders complain endlessly that the current system of private healthcare insurance based on employment provides fewer and fewer people with less and less quality care at higher and higher cost. Yet Corporate America turns its back on a publicly financed system, which, by all indicators, the taxpayers would willingly support.

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Morton Mintz
Morton Mintz covered the Supreme Court for The Washington Post from 1964 to 1965 and again from 1977 to 1980. He is a...

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By a vote of 5 to 4, in December 2003, the Supreme Court upheld a major provision of the McCain-Feingold campaign finance act that prohibits corporations (and labor unions) from paying for ads that mention the name of a federal candidate, and that are broadcast 60 days before an election or 30 days before a primary.

That narrow ruling is now under challenge and could be overturned in the next few weeks, thanks to President Bush's appointments of John G. Roberts Jr. as Chief Justice and Samuel A. Alito Jr. as an Associate Justice.

The case involves Wisconsin Right to Life, Inc., which campaigned to prevent the re-election of Senator Russell Feingold (D-Wis.), by taking large sums of money from corporations to buy phony "issue" ads on radio and television. The ads attacked Feingold and Herb Kohl, the other Wisconsin Democrat in the Senate, for blocking Bush judicial nominees. Under the 2003 decision, such bogus ads were the "functional equivalent" of campaign ads and thus banned by the McCain-Feingold provision.

Outrage over excessive rewards for incompetent executives could spark the Democratic Congress to action.

Publicly financed but privately run healthcare for all--including free choice of physicians--would cost employers far less in taxes than their costs for insurance. Universal coverage could also work magic in less obvious ways. For example, employers would no longer have to pay for medical care under workers' compensation, which in 2002 cost them more than $38 billion. Auto-insurance rates would fall for them--and everyone--if the carriers were no longer liable for medical and hospital bills. You'd think that in its own selfish interest, Corporate America would be fighting to replace the existing system with universal health coverage. Yet it doesn't lift a finger.

Meanwhile, under the Bush Administration healthcare coverage steadily shrinks. In 2000, according to the Census Bureau, 14 percent of Americans didn't have it; in 2003, 15.6 percent--45 million--did not. Actually, 85 million Americans under age 65 were uninsured over varying periods during 2003-04, up from 81.8 million in 2002-03, according to Families USA, the consumer health organization. As more and more Americans become uninsured, spending on healthcare soars. By 2001 it accounted for 13.9 percent of US gross domestic product. (It constituted a much smaller share of GDP in countries with universal healthcare, such as Sweden, 8.7 percent; France, 9.5 percent; and Canada, 9.7 percent.) Average family premiums in 2005 are projected to be $12,485, up $1,768 from 2004. The federal Centers for Medicare & Medicaid Services expects healthcare outlays to rise from $1.8 trillion in 2004 to $2.7 trillion in 2010, nearly a trillion-dollar increase in six years. The forecast reflects annual increases of 14 percent to 18 percent. David Walker, head of the Government Accountability Office (GAO), the auditing arm of Congress, calls them "unsustainable."

A simple fact largely explains why spending bloats while the ranks of the insured thin: Health insurance is increasingly unaffordable. After rising 38 percent between 2000 and the last quarter of 2003, the costs of providing healthcare to employees rose 11.2 percent between January and May of 2004, according to the Kaiser Family Foundation's annual survey of 3,000 companies. "Close to 75 percent of 205 senior-level executives surveyed [in May] by the Detroit Regional Chamber rank employee health insurance as 'unaffordable' and 25 percent consider it 'very unaffordable,'" the Detroit News reported. The Kaiser Family Foundation says that from 2001 to 2004 the proportion of workers receiving health coverage on the job dropped from 65 percent to 61 percent, a loss of 5 million jobs with health benefits.

"Double-digit increases in healthcare costs are a drag on economic growth," says Henry Simmons, president of the National Coalition on Health Care, an alliance of groups working for healthcare reform. They "slow the rate of job growth," "suppress wage increases for current workers," "undercut the viability of pension funds," "put American firms at a steep disadvantage in world markets" and produce "severe long-term budgetary problems" for the federal and state governments.

Two unrelated but mutually reinforcing reports coming out on a single day, August 19, validate the economic-drag theory. First was a study that found a "relationship between job growth and health-care costs" in eighteen industries between 2000 and 2003. It was done for the Kerry campaign by Sarah Reber, assistant professor of policy studies at the University of California, Los Angeles, and Laura Tyson, dean of the London Business School and former head of President Clinton's Council of Economic Advisers and National Economic Council. The evidence, the authors write, "suggests that employers have reduced hiring in response to rising health insurance premiums," and that rising premiums have led to a deterioration in the quality of jobs. In industries where health-insurance benefits accounted for a comparatively large share of total employee compensation, job growth was slower than in industries where they accounted for a smaller one. Thus, in the accommodation and food services industry, "benefits constituted about 12 percent of total compensation for workers...and jobs grew...by about 2.5 percent. In manufacturing...the benefits share was 18.5 percent and job losses topped 18 percent." [Emphasis in original.]

This picture was reinforced by a New York Times article based on "government data, industry surveys and interviews with employers big and small." It said:

A relentless rise in the cost of employee health insurance has become a significant factor in the employment slump, as the labor market adds only a trickle of new jobs each month despite nearly three years of uninterrupted economic growth.... employers big and small...remain reluctant to hire full-time employees because health insurance, which now costs the nation's employers an average of about $3,000 a year for each worker, has become one of the fastest-growing costs.... Health premiums are sapping corporate balance sheets even more than the rising cost of energy.

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