Saturday, March 17, 2007

Alaska State Senator Hollis French Wants To Force You To Spend Your Money On His Universal Health Care Plan


...if you're an Alaskan, that is. This is the message received from his recent Compass column, posted in the Anchorage Daily News on Thursday March 16th, 2007

In his column, entitled "Universal Health Care Can Work For Us", Alaska State Senator Hollis French (pictured at left courtesy of Akdemocrats.org), a Democrat who represents northwest Anchorage, cites skyrocketing health cares costs and gross inequities in coverage as justification for a universal approach. However, he disavows the "single payer" approach sought by more progressive advocates and employed in other nations, most notably the United Kingdom and Canada, instead preferring to "retool" existing health care delivery methods.

Senator French believes the first principle of health care reform is individual responsibility. Unfortunately, he believes part of that responsibility involves imposing a requirement on each citizen to purchase health insurance.

His second principle involves requiring employers who do not offer health insurance to their employees to contribute to a fund to help pay for coverage for those workers who are uninsured. He does concede that some subsidy will be necessary to help those who work for very small businesses. He downplays the costs to business, citing a California plan requiring businesses that do not offer health insurance and have 10 or more employees to contribute 4% of their total wages to a state fund used to subsidize the purchase of health policies for uninsured employees.

Much of his justification stems from a March 2006 ISER (University of Alaska-Anchorage's Institute of Social and Economic Research) study, which showed that only a third of Alaska businesses with fewer than 50 employees offer coverage, compared with 43 percent nationwide. The ISER study also noted that 91,500 of the state's 224,500 private industry employees work for small businesses, meaning that over 60,000 working Alaskans do not get health care insurance through their jobs.

Senator French also wants to redistribute Medicaid coverage in a couple of ways. First, he wants to expand eligibility rules for children and adults and tack on additional dental and vision coverage. Second, he wants to switch from reimbursing hospitals with Medicaid benefits to simply using those funds to provide subsidized insurance for the uninsured. In short: Take the money spent on hospital bills each year for the uninsured, and buy health insurance instead.

Senator French plans on introducing legislation to accomplish as many of these chages as possible.

Note: The referenced ISER study is entitled "The Role of Social and Economic Research in Public Health", produced by former Alaska Lt. Gov. Fran Ulmer on March 14th, 2006. This study is 50 pages in PDF format.

Analysis: Some of Senator French's proposals are rather meritorious. For example, his idea of diverting Medicaid funds from reimbursing hospitals to subsidize health insurance for lower-income or hard-to-insure people is quite smart. This is actually a welcome move towards more free market involvement, promotion of greater individual responsibility, and increased self-empowerment.

Expanding Medicaid benefits to include vision and dental is another needed reform. Many low-income people neglect dental health due to lack of funds or insurance; they think the loss of a tooth is inconsequential. Unfortunately, this can lead to other more serious dental health issues such as gum disease, subsequent bone loss, and possible facial disfigurement.

However, requiring all businesses, regardless of size, to either provide health insurance or contribute to a subsidization fund could jeopardize the existence of many small businesses. French proposes that small businesses be required to pay 4% of workers' wages to a "subsidization" fund. What if the business's profit margin is only 4%? In effect, French has just transformed a profitable business into a non-profit charity. Combine that with proposed hikes in the minimal wage, and one can see a noticeable number of business failures. Or, a business may comply and not fail, but compensate by cutting back a worker's weekly hours.

The fatal flaw in French's proposal is to require that all people purchase health insurance. This is another unfunded mandate imposed on the people. He should know how the Anchorage School District has struggled to meet the underfunded mandates of No Child Left Behind; why would he want to impose yet another unfunded mandate on people? This would be one more way of requiring people to constantly prove their legitimacy with every breath they take, consistent with the growing police state being spawned by this "War on Terror".

And using mandatory auto insurance as a precedence is absolutely bogus; no one really "has to drive", so one can avoid the obligation of auto insurance by not driving. It is not so convenient to invite people to avoid the obligation of health insurance by "not breathing".

And mandating the purchase of health insurance would be inhumane if the occasional person who falls through French's proposed "safety net" is forced to sell his house or his car to pay for it. This means we would have to establish a standard by which no one would be required to pay more than a designated percentage of one's income for health insurance. And if we do that, how do we define "income"? Do we also include assets? If so, do we include all assets in the means test, or only "discretionary" assets. Mandating the purchase of health insurance opens up an incredible bucket of worms.

And finally, if we force everyone to purchase health insurance, we hand an entire captive constituency to the insurance industry. If everyone is forced to buy health insurance, what incentive would the insurance companies have to keep prices competitive? We also know from industry performance in other areas that the insurance companies employ every possible strategem to evade and escape their obligations. Oh, and one more question for you, Senator French. What happens if, for some reason, carriers refuse to provide coverage in Alaska? How would you solve that problem?

I also decided to check the Alaska Public Office Commission's list of individual contributors to his last political campaign in 2004, to see if any insurance companies had exercised inordinate financial influence over Senator French. Out of 67 individual contributors listed, only one identified with the insurance business, so it appears Senator French is not responding to corporate interest.

Perhaps Senator French should examine another jurisdiction's existing similar plan before launching one for Alaska. San Francisco's plan, called the Health Access Plan, previously discussed here on June 24th, 2006, was designed to target an estimated 82,000 uninsured residents who earn too much to qualify for Medicaid. San Francisco Mayor Gavin Newsome stressed that the plan was not meant to replace private health insurance, but rather provide a way to consistently treat uninsured people so they don't end up seeking medical care in hospital emergency rooms. Their plan provides comprehensive preventive and catastrophic health care, covering everything from checkups, prescription drugs and X-rays to ambulance rides, blood tests and surgeries. Pre-existing conditions are also covered. Estimated costs are around $200 million a year, to be paid for by taxpayers, businesses that don't already insure all their workers, and participants themselves. Residents pay both monthly fees and service co-payments on a sliding scale depending on income. A person with annual earnings at the federal poverty line pay $3 per month, while someone who makes between $19,600 and $40,000 — or up to 400 percent above the poverty line — would pay an average of $35 per month. Employer contribution, as outlined in the most recent version of the plan sponsored by Supervisor Tom Ammiano, would require every business with more than 20 employees to pay at least $1.60 an hour into the system for all employees not already covered by a health plan, no matter how few hours they work. Specifically, small businesses (20-99 employees) would end up paying $182.50 per month per employee, and businesses with 100 or more employees would pay $273.75 per month per employee. But while the premiums are quite affordable to people, can our small businesses afford these costs, though?

Ultimately, if the goal is to get more people to purchase health insurance, it must be made more affordable. To expect people to pay more than 10% of their income for health insurance is ludicrous. But we can't be driving small businesses into bankruptcy, either.

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