Free Market Healthcare is Immoral

Free market healthcare is immoral because under such a system the medical needs of people — yourself, your loved ones, your fellow citizens — are an affront to the profits of insurance companies and medical providers. This leads to the mistreatment and death of innocent people. When their financial interests do not align with your health needs, private powers choose the former. Healthcare is a matter of life and death, so let us explore the problems and solutions.

Before 2010, the year Obamacare took effect, nearly 50 million Americans were uninsured; in 2017 nearly 30 million remained uninsured.

Before the Affordable Care Act, private insurance companies denied coverage to citizens with pre-existing conditions or charged them and the elderly more. Covering someone already ill wasn’t profitable. 650,000 Americans were denied insurance from 2007 to 2009 by the top 4 firms alone.[1] That’s one in seven applicants; 213,000 were insured customers who had their coverage rescinded. California state investigators found PacifiCare improperly denied 30% of claims between 2005 and 2007, with 130,000 claims processing violations.[2]

The lists of medical reasons for denial are long. One company had 400 diagnoses that could get you denied, including diabetes, heart disease, and pregnancy (“Please keep up the good work with the marketing reps of not trying to sign up pregnant women,” as an internal email from a medical management director at Amerigroup Corp. put it; insurers habitually overcharge women for care).[3] Across the board there are over 1,000 conditions, from breast cancer to lymphoma, that could leave you uninsured.[4] A quarter of Americans have some form of pre-existing condition.[5]

Yes, even those who were not denied initially could become victims when they grew ill. As a retired Cigna senior executive put it, insurance companies “look carefully to see if a sick policyholder may have omitted a minor illness, a pre-existing condition, when applying for coverage, and then they use that as justification to cancel the policy, even if the enrollee has never missed a premium payment… Dumping a small number of enrollees can have a big effect on the bottom line.”[6] When consumers are dropped they are left to cover the bill, usually thousands or tens of thousands of dollars, sometimes reaching six figures. Parvin Mottaghi of Los Angeles was stuck with a $100,000 bill when Blue Shield refused to cover her heart surgery they had previously approved.[7] Brittany Cloyd of Kentucky went to the emergency room in pain from what turned out to be ovarian cysts. Her insurance company, Anthem, sent her the $12,600 hospital bill because it decided her medical problem wasn’t “severe enough” for an E.R. visit. This is their policy, not an aberration, and discourages people from seeking help.

Insurance giants must “satisfy Wall Street investors,” to quote the Cigna senior executive.

The average family doesn’t understand how Wall Street’s dictates determine whether they will be offered coverage, whether they can keep it, and how much they’ll be charged for it. But, in fact, Wall Street plays a powerful role. The top priority of for-profit companies is to drive up the value of their stock. Stocks fluctuate based on companies’ quarterly reports, which are discussed every three months in conference calls with investors and analysts…

To win the favor of powerful analysts, for-profit insurers must prove that they made more money during the previous quarter than a year earlier and that the portion of the premium going to medical costs is falling. Even very profitable companies can see sharp declines in stock prices moments after admitting they’ve failed to trim medical costs. I have seen an insurer’s stock price fall 20 percent or more in a single day after executives disclosed that the company had to spend a slightly higher percentage of premiums on medical claims during the quarter than it did during a previous period…

To help meet Wall Street’s relentless profit expectations, insurers routinely dump policyholders who are less profitable or who get sick.[8]

He further explained what most of us already suspected—that benefit documents are intentionally incomprehensible. “Insurers know that policyholders are so baffled by those notices they usually just ignore them or throw them away. And that’s exactly the point. If they were more understandable, more consumers might realize that they are being ripped off.” This executive, Wendell Potter, quit after Cigna refused to cover a teenager with leukemia in need of a liver transplant. She died. Her name was Nataline.

Employees earned high marks and were given bonuses for dropping sick policyholders.[9] For example, the Los Angeles Times reported: “Health Net Inc. avoided paying $35.5 million in medical expenses by rescinding about 1,600 policies between 2000 and 2006. During that period, it paid its senior analyst in charge of cancellations more than $20,000 in bonuses based in part on her meeting or exceeding annual targets for revoking policies.”[10] Countless other tactics put profits over people: insurers capping the amount they will pay on your medical needs yearly or over the course of your life, unwarranted rate hikes, raising premiums so high as to intentionally force businesses to abandon healthcare for workers, scheming with healthcare providers to jack up prices, marketing scams, defrauding the government, etc.[11]

Insurance giants overrule the treatments determined by doctors to be best for their patients. After her doctor prescribed a medication to battle her inflammatory disease, 18-year-old Chanel Bunce of Seattle was told by her provider that the cost would not be covered because the treatment was “experimental.” Without the medication, Bunce died three weeks later. This is not an isolated incident. In surveys the percentage of doctors who feel insurance companies inhibit them from providing the best care to patients is 90% or more.[12]

Somewhere between 22,000 and 45,000 died each year from lack of medical insurance in the 2000s.[13] Uninsured people sacrifice visits to the doctor, prescription drugs, and other forms of treatment because they cannot afford them, and thus make health problems worse or never discover them until it is too late. Children without insurance were 60% more likely to die after hospitalization than those with insurance.[14] As more people gain insurance, deaths are reduced. Obamacare was modeled after a Republican-led program in Massachusetts where every 830 adults who gained insurance translated to one fewer deaths.[15] Obamacare determined colonoscopies should be free; the number of Americans undergoing colonoscopies rose, increasing early colorectal cancer detection, saving thousands of lives.[16] It should not be surprising lack of insurance is a death sentence, considering how much treatment costs without it, from hundreds a month to treat diabetes (and $5,000-$7,000 for an insulin pump) to over $100,000 for just the first year of treating brain cancer.[17] Those who don’t perish are ruined financially. In 2013, an estimated 645,000 bankruptcies were linked to massive medical bills.[18] At the beginning of 2016, 20% of insured Americans were having difficulty paying their medical bills.[19] 63 million insured people say they have had to sacrifice needed care due to cost.[20]

While some conservatives claim all Americans have access to healthcare because hospitals have emergency rooms, this is absurd on its face. Even though you can get emergency surgery or medicine without insurance at the E.R., you cannot get chemotherapy, nor preventative care and tests that can detect illnesses and disorders early on, saving lives. (In other parts of the world, people die outside emergency rooms because they have no money or insurance.) E.R. visits leave people with massive bills, anywhere from $100-$12,600 more than Medicare recipients pay. Further, unless we switch to a model where taxes cover insurance for all, we will struggle to preserve the necessary and moral U.S. law that no one can be turned away from an E.R. because he or she is uninsured. Emergency rooms will continue to shut down, overcrowding all the others, because they are underfunded. The U.S. lost a quarter of its emergency rooms between 1990 and 2011 because the patients had no money and no insurance provider hospitals could bill.[21]

And getting to the E.R.? Ambulance rides cost thousands, sometimes nearing five figures. If you have insurance, your provider will cover part of it — if you’re lucky.

While the Affordable Care Act created a marketplace (the “exchange”) where more people could find affordable healthcare plans and get government subsidies to cover some costs, this funneled money into the hands of abusive private powers, only worsened by the legal requirement that citizens purchase their insurance. While the Act did help millions gain access to affordable healthcare and protected people with pre-existing conditions from rejection and consumers from rescission, the problems with the law were immense: insurance companies hiked their premium rates, reduced benefits, or even pulled out the exchange if they lost money, states (mostly Republican) opted out of the Medicare expansion (leaving many Americans not poor enough for Medicare but too poor to afford insurance through the exchange), businesses slashed worker hours and kept employee totals low to avoid having to provide insurance to workers, etc. And naturally insurance companies still sought ways to avoid paying for the medical needs of their customers despite Obamacare reforms, even ignoring the law entirely.[22] This is why even if a free market healthcare system could somehow lower costs of high quality insurance so far everyone could afford it (doubtful, consider America’s dire poverty and capitalism’s worsening monopolization eliminating competition in the medical insurance industry and others), people would still be sacrificed on the altar of profit.

Clearly, under the current system the desires of insurance companies and healthcare providers for profit are antithetical to the medical needs of human beings. Wouldn’t a system in which people didn’t need health insurance be preferable? Where people could visit their doctors and if they needed a procedure or medicine they couldn’t afford the government would cover it? Where insurance companies died out because they were no longer needed? Isn’t circumventing the profit motive the ethical thing to do, to save lives?

Virtually all other advanced nations have enjoyed nationalized medicine for decades, systems that offer true universal coverage in which taxes cover everyone’s medical needs. In Germany (a nation that has been improving its universal system for 125 years[23]), even guest workers can see a doctor and receive free treatment, as my cousin experienced. You walk in, walk out, and the State covers the cost of your care.

This does not mean the State must own the hospitals and pay the doctors and other workers, as in Britain. The workers—the doctors, nurses, and janitors—should own the hospitals and clinics. Opponents of universal healthcare in the U.S. often point to the conditions and abuses in VA hospitals, which are indeed a problem, but what’s needed is not more government-run hospitals like those of the VA but rather an expansion of Medicare, wherein the government foots citizen bills at private medical institutions. Medicare and Medicaid, which cover medical costs of the poor and the elderly, are very popular programs that, if funded properly, are very effective. Critics don’t always understand that there is more than one universal healthcare model. There’s the Beveridge Model, in which the government owns and runs hospitals (Britain, Spain, Hong Kong, and others). The Bismark Model entails private insurance funds that employers and employees pay into, like in the U.S., but insurers are strictly non-profit and must cover everyone no matter what (Germany, Japan, Switzerland, etc.). With a National Health Insurance Model, the government operates an insurance pool funded by taxes and pays the healthcare bills of citizens (Canada, South Korea, Taiwan, and so forth). In some single-payer countries, like Denmark, Sweden, and Finland, everything is done locally, with taxes for healthcare going to cities and counties, not the federal government. Sweden’s system is decentralized, controlled by town councils, using private doctors and competition to keep down costs.

To reiterate, State ownership of hospitals and clinics is in no way a requirement of universal healthcare. It is a simple matter of a doctor’s office sending a bill to the State and the State writing a check. Clinics and hospitals continue to compete to provide the best services and highest quality care to keep people coming through the doors.

No, this does not plunge nations into dictatorship, in the same way Medicaid and Medicare haven’t eroded American democracy or human rights. While universal healthcare will always be at risk of being defunded by politicians, most other concerns are simply rightwing fear-mongering (recall the “death panels” hysteria during the Obamacare debate and other notions of bureaucrats deciding who gets care). While the State can without question be abusive, keeping politicians in line regarding healthcare funding and access is a far easier task for the populace than stopping the abuses of private powers. First, democratic mechanisms give people more control over the State. Second, medical provider abuses are fueled by the profit motive; you’d have to get rid of the latter entirely to make the former history. The notion that consumers will drive abusive insurance giants into the ground by refusing to give them business has no merit, easily dismissed with the question “Why hasn’t it happened yet?” The awful practices have been going on for a long time, why aren’t Cigna and Aetna collapsing due to popular abandonment? The industry is dominated by a handful of multibillion-dollar giants that aren’t going anywhere.

Skeptics warn that healthcare costs for providers—everything a hospital needs to purchase, from software to scalpels—will rise out of control if consumer care is subsidized. Yet manufacturers still need to offer competitive, attractive prices because hospitals still choose whom to purchase from and must remain choosy because their budgets are not unlimited—they still depend on how many people come through the door for help, which determines State funding. This is like how public schools don’t face skyrocketing prices for pencils, paper, desks, computers, and smartboards. Predictably, it is therefore not more expensive to care for people in single-payer systems; it’s actually cheaper. Hospitals in comparable nations with socialized medicine spend far less per patient discharged than U.S. hospitals. The current U.S. system is the world’s most expensive per person—and underperforms in areas like efficiency, equity, and (obviously) access compared to nations that spend less on healthcare.[24] In other areas like quality of care things are about even. Some Americans leave the country for more affordable care. Michael Shopenn’s surgery would have cost $100,000 in the U.S., but he got it done for under $14,000 in Belgium—airfare included.[25] 1.4 million Americans went abroad for medical care in 2016. Cost increases are caused by many different factors in private and public systems alike, but there is no question healthcare in nations such as France are more efficient, more popular, and far less expensive per citizen and as a proportion of the GDP than in the United States.[26] There are many ways universal healthcare can lower costs for hospitals and clinics. For one, research comparing the American and Canadian healthcare systems reveals having one central place where bills are sent saves colossal amounts of money in administrative and overhead costs.[27] It also frees providers from having to spend so much on advertising. Problems can be caught earlier and more expensive solutions avoided when people aren’t afraid to see a doctor due to cost. Preventative care works the same way.

It’s been estimated that universal healthcare would cost the U.S. $1 trillion to $2 trillion a year, not too different from the $3 trillion we Americans spend on healthcare today, in the form of out-of-pocket care and private insurance for individuals and businesses, as well as taxes for Medicare, Medicaid, etc.[28] Converting spending in the private sphere to new taxes for universal healthcare is a trade-off that can save individuals and businesses money. Even a Koch-funded libertarian think tank like the Mercatus Center has calculated that Medicare For All would save $2 trillion over ten years compared to the current state of affairs. That’s less money Americans have to spend. Our cost in taxes to cover everyone is lower than the cost of maintaining the current private-public system where tens of millions are not covered.

If you look at other advanced democracies with universal coverage, some indeed have higher average income tax rates than we do (20%-24% higher in places like Germany, Denmark, and Belgium), but some aren’t all that different. An individual making an average salary in the U.K. has a rate 3% higher than one in the U.S. The Czech Republic has a universal system, but couples with two children pay a tax rate half of what a U.S. couple would pay. South Korea pays a tad less than the U.S. in both areas. Higher income earners in Germany and South Korea take home larger portions of their income than higher income Americans. And nearly every nation in Europe, and around the world, has a lower corporate tax rate than the U.S. While an increase in taxes is necessary for the United States to enact this program (as is a discussion on whom should shoulder the heaviest burden), skyrocketing taxes are not.

And if we are concerned with reducing costs, of course, we could always reserve free healthcare for those making below a certain income level, such as $500,000 a year (this level would have to be high, as some treatments cost hundreds of thousands out of pocket). Overall, the conversation on cost (and rising costs) cannot end without the obvious being stated: the United States is the richest nation in the history of the world. If other countries can survive and thrive while providing medical care to all, so can we.

No, universal healthcare systems are not perfect. They can be meddled with by politicians. They’re expensive. They usually rely on heavier taxes (if nations are wise, on the wealthy). Issues like wait times concern some critics, though this is caused by multiple factors in private and public systems alike, and while the U.S. has shorter wait times in some areas of healthcare (like elective surgery and specialty care), for others it has far longer wait times (such as scheduling a standard appointment with your doctor, a key to catching and fixing ailments early).[29] While there will always be obstacles, we can learn from the mistakes and successes of other nations. The most important success was circumventing a for-profit system that leaves tens of thousands of innocent men, women, and children dead every year from preventable medical problems.

Without question, socialized medicine is the moral thing to do.

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Notes

[1] http://www.cnbc.com/id/39646830

[2] https://khn.org/morning-breakout/dr00050126/

[3] https://www.propublica.org/blog/item/insurers-denied-health-coverage-to-1-in-7-people-citing-pre-existing-condit, https://web.archive.org/web/20170701070032/http://hcfan.3cdn.net/48b73f19dac6bc9fa7_vzm6iijoh.pdf

[4] http://articles.latimes.com/2009/jun/17/business/fi-rescind17

[5] https://www.usnews.com/news/articles/2016-12-12/1-in-4-americans-have-pre-existing-conditions-that-could-hinder-coverage-if-obamacare-repealed

[6] http://abcnews.go.com/Business/Health/story?id=7911195&page=1

[7] https://www.huffingtonpost.com/peter-dreier/wellpoint-poster-child-fo_b_294343.html

[8] http://www.pbs.org/moyers/journal/07102009/potter_testimony.html

[9] http://articles.latimes.com/2007/nov/09/business/fi-insure9; http://articles.latimes.com/2009/jun/17/business/fi-rescind17; Sicko