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Vol. 73/No. 32      August 24, 2009

U.S. bills on ‘health care’
boon for big business
(front page)
The U.S. House of Representatives and the Senate failed to bring bills for “health-care reform” to their full chambers before their August recess but moved closer to reaching a deal that favors the insurance and hospital industries and major drug companies, and includes further cuts in Medicare and Medicaid.

The “reform” proposals would be a profit boon for the owners of the health-care industry by making it mandatory for people to buy insurance, either from private companies or from a government-sponsored plan. A limited government subsidy in the form of tax credits would be available to eligible low-income individuals to purchase insurance.

Some of the original proposals hailed by the Barack Obama administration to increase access to health coverage are being thrown by the wayside as the legislation evolves.

Legislators have said, for example, that there will very likely be no provision for a government-run insurance option, which insurance companies and some medical associations opposed. Instead legislators are proposing a “non-profit” cooperative to sell insurance “to compete” with private industry.

The Senate Finance Committee tightened eligibility for subsidies to help pay insurance premiums and reduced assistance for people who qualify.

All the House and Senate bills on health-care reform require individuals to purchase insurance or face a fine. According to one proposal in the Senate a person could avoid the fine if the cost of the cheapest available health plan was more than 15 percent of the person’s income. “If a family making $70,000 has to pay 15 percent of its income for insurance [$10,500], that could be a real hardship,” said Judith Solomon with the Center on Budget and Policy Priorities.

Along with negotiations between Democratic and Republican leaders in Congress, the Obama administration has also been making behind-the-scene deals with health-care industry lobbyists to win support for the plan. On August 7, White House officials backed away from what a drug industry representative had said earlier that week was a “rock-solid deal” to protect drug companies from covering further costs of the health-care plan.

Representatives of the drug industry announced that they had reached an agreement with the White House in June to contribute a maximum of $80 billion over 10 years toward the $1 trillion the plan is estimated to cost. In return the White House would block any clauses in the bills that would allow the government to negotiate lower drug prices or require additional price rebates.

The White House denied the existence of such a deal and pharmaceutical companies were alarmed to see that a House version of the bill still included the clauses.

After threatening to reverse their support to the plan, drug industry representatives were backing it once again after the White House removed the price rebates in the House bill, reported the New York Times.

Much of the cost of implementing a “health reform” package will be covered by squeezing hundreds of billions of dollars out of Medicare. Obama said that the plan is “not going to reduce Medicare benefits. What it’s going to do is to change how those benefits are delivered so that they’re more efficient.”

In fact, many are finding out that an increasing number of physicians refuse to accept new patients covered by Medicare because they claim Medicare payments are too low.

A proposed 20 percent cut by Medicare in payments for radiation therapy is before Congress. An American Society for Radiation Oncology survey said it would result in many cancer centers, especially in rural areas, closing or consolidating operations.  
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