Lipstick on a pig: The failure of Obama’s health-care reform

By Billy Wharton

July 19, 2009 – Consider it a symptom of a larger disease. A fervent commitment to defend the profit margins of private industry seems to be a national religion for politicians in the United States. No matter how deeply the private sector mucks up society, some senator or representative or, if things get really out of control, president will appear to rescue the day for the corporations all in the name of justice for the citizens of the US. Like any religion, this process has highly crafted rituals. First a confession, then march the sinners around at one hearing or another, then mete out acceptable penance and then all is forgiven.

It is difficult to tell whether the US House of Representatives-sponsored “America’s Affordable Health Choices Act” is the penance or just straight forgiveness. The bill purports to be the solution for United States' health-care crisis. Representative Christopher Dodd went further, calling it, “The bill we all have been waiting for and fighting for, for 60 years.” Curbs on industry excesses, a public option and high-sounding rhetoric about universal care all dress up the fundamental motivation of the bill -– find a way to prolong the life of an already failed private health insurance industry.

Of course, failure is a relative term. Private health insurance companies are quite efficient at completing the task they were designed to carry out: accumulating profits. In 2006, for instance, health-care companies accumulated more than US$10 billion in profits. Not surprisingly, they are far less able to deliver health care. About 50 million people or 16% of the US population, have no health insurance, another 30 million more can be considered under-insured and about 20,000 die each year from treatable illnesses.

Americans have developed two responses to this unjust system –- avoiding care and filing for bankruptcy. A recent Kaiser Family Foundation poll indicated six in ten Americans had either delayed or deferred necessary medical care in the last year. The four who do attempt to use the health-care system, will likely face the prospects of high fees and, ultimately, indebtedness. The majority, some 52% by last count, of personal bankruptcy claims are, therefore, the result of debts related to health care.

The bill does little to address the structural failures of private corporations. Instead of a single-payer plan which would address the problem of cost and coverage by eliminating private health insurers, thereby opening access, the House bill proposes coercive mandates to herd the great mass of the uninsured toward private plans. Key to this is a focus on keeping costs low in the private plans. The problem is that there are only two ways to do this -– offer high-fee, high-deductible plans or offer plans with bare-bones coverage. Both maintain high profitability for the corporations, while fuelling the logic of health-care avoidance and debt accumulation.

Some of the uninsured may resist this drive into private health insurance plans designed for corporate profitability. The House of Representatives, under the advice of President Barack Obama, has therefore designed an intricate system of coercive penalties. Americans will either have to prove enough hardship to qualify for the public option or pay a 2.5% penalty on their annual income. Considering the high costs of monthly health-care premiums, we can imagine that many may opt to pay the fine in order to avoid the higher costs of a private plan.

To make up the difference, the House bill proposes the issue of “affordability credits” in order to, “reduce cost-sharing to levels that ensure access to care”. Where will these credits, read taxpayers' money, be headed? Directly to the private health insurance industry. Here again the new logic of the Obama regime is put to work. Instead of using the state to solve social problems by nationalising, or socialising industry, the administration chooses to toss taxpayers' funds at the private sector. All the while, they employ free-market language –- increased competition, market areas and individual responsibility -– to cover what is essentially a transfer of public funds to large corporations. No wonder nary a word of protest has been uttered by the normally vociferous private health-care industry.

As the House of Representatives trots out its 1000-page bill complete with 360 amendments from the Republicans, objections are sure to emerge. Obama and Congress will face harsh, and not entirely unjustified, criticism from fiscally conservative Democrats and Republicans. Most will base their arguments on the Congressional Budget Office estimate that the plan will cost more than $1 trillion over the next ten years. Others will play the small business card, arguing that a disproportionate burden may fall on this sector. A few right-wing libertarians will object to the coercive penalties, but this criticism might be done far more skillfully from the left. Yet, the fact remains that the institutions and the logic that fuelled the health-care crisis will survive. In fact, those who can claim the largest market share in the health-care industry will enhance their position.

What is evident in this debate is the decomposition of the neoliberal capitalist project born in the 1990s. No longer able to peddle the gospel of unfettered markets, corporate United States has returned to its origins by making a parasitical living off of state funds. If now the public sector can no longer be automatically discredited ideologically, it will be bankrupted financially. Obama was more correct then he knew when he commented, in relation to comments made by Republican vice-presidential candidate Sarah Palin, “You can put lipstick on a pig, but it is still a pig.” Americans would do far better, in regards to the private health insurance industry, with a plate of bacon than a bill for lipstick.

Meanwhile, somewhere in the US House of Representatives there lies a 13-page bill called HR 676. This Act would create a publicly funded National Health Insurance Program -– a single-payer system. Single-payer health care would guarantee full medical coverage to every person in the US and would be funded through combining the budgets of existing programs with a payroll tax shared by employers and employees and a tax on wealth.

Its existence marks the urgency of the crisis; its elimination from health-care reform discussions marks the narrow parameters of “the possible” in Obama’s Washington. This confirms the ideas of left-wing advocates of single-payer health care, that only a mass social movement can make such fundamental changes as the elimination of the private health insurance industry possible. The rallying cry for such a movement might be a slogan from the Black freedom struggle of the 1950s and 60s –- 99 and a half per cent free just won't do.

[Billy Wharton is the editor of The Socialist and the Socialist WebZine. His articles have recently appeared in the Washington Post, Monthly Review Webzine, The Indypendent, Common Dreams and Links International Journal of Socialist Renewal.]