The recently passed federal healthcare reform legislation, H.R. 3590 ("Patient Protection and Affordable Care Act") and H.R. 4822 ("Health Care and Education Affordability Reconciliation Act of 2010"), along with a companion executive order aimed at preventing circumvention of the Hyde Amendment, fails to meet human rights standards. Rather, this legislation entrenches the treatment of healthcare as a commodity by mandating the purchase of a private insurance product.
While the new legislation contains some positive elements, such as expanded access to health insurance for poor people, increased funding for community health centers, improved whistle-blower protections and regulation of private insurance corporations to prevent the most egregious forms of discrimination, the overall reform approach is that of locking people into a market mechanism that sells access to healthcare based on a person’s ability to pay rather than according to their health needs.
This approach fails to move the United States toward a healthcare system that is universal, equitable or accountable to the people that it serves, and the reform process itself has lacked transparency and participation.
Fundamentally, this legislation lacks anything that could serve as a path to real reform, such as a Medicare buy-in or even a "public option." Similarly, it fails -- even though it offers the possibility in 2017 of some waivers for state innovation -- to allow states to avoid the restrictions of the ERISA that prevent a real single-payer experiment in this country.
It is hard to explain or justify this approach by any logic other than that of treating healthcare as a source of profit for the health insurance, pharmaceutical and other medical industries.
Introduction
We evaluate the ongoing federal healthcare “reform” proposals using the human rights principles of universality, equity, accountability, transparency and participation. These fundamental principles give rise to specific human rights standards for healthcare financing, which enable us to assess reform proposals through a set of key questions, outlined below.
Q & A
- Is the legislation designed to protect people’s health and guarantee comprehensive healthcare?
- The new legislation does not entitle people to receive the healthcare they need. Instead, healthcare is treated as a commodity that people must buy from insurance companies (possibly with public subsidies), unless they are eligible for public programs. The government itself estimates that at least 23 million people will still lack healthcare after the legislation goes fully into effect (sometime between 2014 and 2020).
The reform debate has not been about protecting and improving people’s health but about the economic impact of health expenditures. A key concern of policymakers has been to protect the financial health of the private insurance, drug and hospital industries by avoiding a public plan or price negotiations. Instead of eliminating market incentives and profit motives as factors that take precedence over people’s health, the proposals solidify the role of private insurance as the principal funding mechanism for healthcare in the United States, turning everyone into a mandated customer. In contrast, proposals such as single payer (Medicare for all), based on removing insurance middlemen in order to guarantee comprehensive care for all, were ruled out from the start of the debate.
- Does the legislation ensure equal access to high-quality healthcare for all?
- No.
Under the new legislation, each person — or family — would have to buy a plan from an insurance company, which would control their access to healthcare. Different insurance plans would cover some treatments but not others, would allow people to seek care from one doctor but not another or could even deny coverage for certain necessary care altogether.
In addition, different groups of people would get different coverage and therefore different access to care, depending on their ability to pay.
- Some women would not be able to obtain comprehensive reproductive health services.
- Lower- and middle-income people might be able to pay for just a bare-bones insurance plan, or they might have difficulties paying their co-payments and deductibles, or they might not be able to afford a plan at all — and instead would have to pay a tax penalty.
- Older people could pay three times as much as others for the coverage.
- Undocumented immigrants would be excluded from the system entirely.
In other words: people would not be able to receive healthcare according to their health needs. Instead, factors such as income or wealth, age, sex and immigration status would continue to determine access to care.
- Does the legislation assume responsibility for financing healthcare publicly, to ensure equal and easy access for all?
- No. Healthcare continues to be treated primarily as a commodity sold by and for private interests, rather than a public good that belongs to all.
The exceptions are an expansion of the public Medicaid program to cover people with income under 133% of the federal poverty level and tax credits for those under 400% of the federal poverty level.
- Does the legislation eliminate financial barriers to seeing a doctor, such as co-payments and other out-of-pocket costs?
- No. Although the new legislation ends most cost-sharing for preventive care in the Medicare system and for children, all other doctor and hospital visits are subject to a deductible and co-payments, even for low-income people.
It has been shown that any payment at the point of service (i.e. seeing a doctor) deters people from utilizing needed care, which is why human rights standards call for the pre-payment of all costs — preferably through a system of broad-based, equitable taxation or sliding-scale social insurance contributions.
- Does the legislation propose an equitable way of financing healthcare, so that affordability is no longer an issue when people need care?
- Equitable financing of healthcare would mean that people pay according to their means and corporations would contribute their share to the cost of the system as a whole. While the legislation mandates that all individuals buy health insurance, it requires only larger employers to contribute to this insurance. To enable individuals to comply with the mandate, the legislation expands eligibility to Medicaid and subsidizes the insurance purchase of other lower income people. The bill also outlaws gender rating, so that women no longer have to pay more than men (although women will now have to pay some additional costs to get comprehensive reproductive health services), and it will eventually (2014) prohibit rating based on health status or pre-existing conditions. But older people will still have to pay much more than younger people, with age assuming a proxy role for health status.
These new rules and subsidies fail to make healthcare more affordable for all. Though premium subsidies (in the form of tax credits) will eventually (2014) be available for those with incomes below 400% of the federal poverty level, and premiums will be capped at between 3.5 and 9.8% of income, there is no cap on out-of-pocket expenses. As we know from our current system, in which most personal bankruptcies are the result of healthcare costs, and most of those bankruptcies are of people who have health insurance, having health insurance is not the same thing as being able to use it. The federal legislation has ignored the need for healthcare, replacing it with the mandate for health insurance.
Moreover, with few effective controls on costs and thus on premiums and matching subsidies, access to coverage is likely to become even less affordable over time, as the “reformed” Massachusetts system demonstrate.
- Does the legislation use resources cost-effectively and sustainably to protect the health of all?
- No. The legislation fails to enact health industry reform, with almost no changes to provider payments and no price controls on insurance and pharmaceutical companies. On the contrary, media and industry reports have predicted a substantial increase in revenues for both the insurance and drug industry, with insurers alone poised to receive around $500 billion in subsidies along with many millions of new customers.
The lack of provider payment reform — with the exception of some pilot projects in Medicare — means that wasteful fee-for-service payments will continue, as agreed by the White House in its negotiations with hospital representatives.
In contrast, human rights principles require distributing funds according to health needs, not industry interests. Moreover, subsidizing the existing industry is not financially sustainable in the medium to long term, as experiments in a number of states — such as Massachusetts — have shown.
- Will the “reformed” healthcare system be accountable to the people?
- No. The legislation treats people as consumers, not as citizens to whom the healthcare system has to be accountable.
Nor is sufficient attention paid to patients’ rights, safety and participation. The legislation merely seeks to improve “consumer protections” through several regulatory requirements for insurance companies, including grievance and appeals mechanisms. But it does not address the market incentives that drive insurers to limit and deny care in order to generate revenue.
Moreover, through perpetuating a fragmented “system,” the functioning of this system is likely to become even more incomprehensible and opaque to ordinary people, rather than empowering them to exercise an oversight function.
By focusing on private insurance as the mechanism for financing healthcare, the new federal legislation fails to ensure that people can exercise control over the way healthcare is financed and delivered. There is no mechanism to assess whether the system is in compliance with human rights principles.
In contrast, public financing and administration of healthcare would utilize public agencies at local, state and federal levels that would be directly accountable to democratically-elected representatives and would enable people to take part in — and challenge — decisions that affect their healthcare services.