In lockstep with its 1960s opposition to Medicare, the American Medical Association continues to promote health insurance profits over affordable, quality health care for all. In late August, the AMA released a plan, “Voice for the Uninsured,” detailing its agenda to reduce the number of uninsured people in the United States.
According to numbers released by the Census Bureau, the number of uninsured people in the United States increased to 47 million in 2006 — and millions more are underinsured.
The AMA plan is not new; it contains echoes of President Bush’s proposal for tax-deductible health savings accounts. It is, however, backed by a sleek marketing operation, complete with an impressive web site and billboards in several important 2008 presidential primary states.
The AMA proposes a scheme where individuals would receive a tax credit to use toward paying their insurance premiums. The credit would be larger for lower-income people. It would be claimed on one’s annual tax return.
For example, if a person’s tax liability were $1,000, but their health care tax credit was for $2,000, the person would receive $1,000 as a tax refund — provided the full $2,000 were used to purchase insurance.
To fund this scheme, the AMA proposes forcing employers to pay payroll taxes on employee’s health benefits. Another possibility is forcing employees to pay income tax on the value of their health benefits.
Another component of the AMA plan is to reduce regulation of the insurance industry, including allowing companies to continue to cherry-pick who they cover, excluding sicker patients and denying coverage for pre-existing conditions. The AMA wants rules that would allow for “greater national uniformity of health insurance markets.” The end result would be to tie the hands of state governments who want to protect their residents from profiteering by the industry.
The theoretical underpinning of the proposal is that health insurance is the same as health care. It is not. Health care costs are the No. 1 cause of personal bankruptcy — and three-fourths of health-care-related bankruptcies involve people insured at the onset of their illness. Health insurance is not a guarantee of full care.
The AMA argues that free markets will lower prices of health insurance. According to the Kaiser Family Foundation, the cost of insurance premiums climbed 6.1 percent from 2006 to 2007 (inflation was 2.6 percent and workers’ earnings increased 3.7 percent). In our free market economy, the price of health insurance continues to rise — not fall. The average yearly cost of family coverage is $12,106 (with employees contributing an average of $3,281), while the average yearly cost of individual insurance is $4,479.
Insurance purchased in the individual market is more expensive because of several factors. Many employers contribute significantly to covering health costs. On the individual market, the cost of premiums is determined solely based on the individual’s risk profile. Sicker individuals may have premiums that exceed the value of tax credits, preventing their purchase of health insurance.
The AMA scheme also ignores, in effect, the barriers that deductibles and co-pays present to accessing care.
Insurance companies profit by denying care, by creating barriers to their customers from accessing care (i.e. deductibles), and by creating customer bases through excluding people who may need care. A tax-credit scheme like the AMA’s would keep all these inefficiencies in place, and would increase company profits by allowing them to charge more expensive premiums because the government would help subsidize it. The AMA plan is not aimed at expanding access to health care; instead, the objective is give taxpayer money to for-profit companies.
The AMA, in fact, is in crisis. Currently representing less than 20 percent of U.S. physicians, it is losing members and is unable to connect with the values of today’s doctors. This is a desperate effort to play lip service to an issue that deeply affects many doctors.
The only way to expand affordable, quality care to everyone in the U.S. is to get the profit motive out of health care. The American public deserves a system that prioritizes their health over shareholder profits. America’s doctors should be at the forefront of demanding affordable care for everyone, not helping greedy companies get big bucks from the government.
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