Health Plan B

Gov. Rendell wants everybody to be insured, but his isn't the only proposal.

by Tom Namako

health insurance

HIGH PRICE TO PAY: When James Anderson was laid off from his job, the lowest estimate he received for insurance was $600 a month. Photo By: Michael T. Regan (CLICK IMAGE FOR LARGER VERSION)

In January, Gov. Ed Rendell held a news conference in Harrisburg to explain the complex funding plan behind his initiative to cover the uninsured. His idea to fill the gap between those with and without health care rolled out just a month earlier, and countless newspapers — including this one [Cover, "A Cure for What Ails Us?" July 18, 2007] — began breaking down the program. One of the most telling quotes came after Rendell said the "Cover All Pennsylvanians" program would subsidize private insurance to make it more affordable: "It's the right plan, at the right time."

He was, in part, correct — except that most Pennsylvanians thought it was the only plan.

About six months after Rendell introduced the program, a Roxborough-based state representative proposed her own health-care-reform agenda, which has been sitting in the state legislature ever since. Known as a single-payer system, the bill was sponsored by Rep. Kathy Manderino and supported by 29 other Democrats (Rendell's, in comparison, was backed by 11). Single-payer supporters say that unlike Rendell's, their approach removes insurance companies as the middlemen and cuts down on the bureaucracy that sucks up million of dollars of health-care costs.

"Theoretically, it doesn't have competing insurers advertising and therefore pulling dollars away from actual care," says Mike Campbell, director of the Pennsylvania Health Law Project, a health-care consulting firm for low-income and elderly people.

It's a nice debate to have, especially considering that nearly 800,000 out of 12 million Pennsylvanians are uninsured. Ideally, the concepts should battle it out in the legislature with the best plan garnering the most votes.

In reality, though, Manderino's doesn't stand a chance.

James Anderson considers himself blessed. The 55-year-old Southwest Philly native lost his job, and health coverage, when he was laid off as a driver for a private school-bus company this year. He called several private insurers for quotes, and the best offer was $600 a month. No thanks, he said.

"Now, if anything serious happens to me," he says, "that's it. I'd be finished financially, if not physically." Anderson is hoping for change.

The governor wants to pay for a majority of an uninsured individual's health-care bills with business taxes, federal dollars and money-saving techniques like limiting costly operating-table infections and convincing smokers to put the lighters down. The plan — which would cost more than $700 million in its second year — would provide basic coverage.

Manderino's idea is broader. A single-payer plan would be mandatory for every Pennsylvanian, with or without coverage, because it works like the current Medicare program. Working Pennsylvanians would pay a 3 percent tax on their monthly income, and businesses would pay a 10 percent tax on their total payroll. The money would go into a large, state-controlled fund. Other revenue would come from a settlement with tobacco companies and federal funds. Those public funds then pay for procedures done mostly at private hospitals.

Say Anderson broke his arm and was taken to an emergency room. The usual team of medical technicians would care for him and then forward the cost to the government-administered health-care fund, which should reimburse the hospital.

This, according to Chuck Pennacchio, the executive director of Healthcare for All Pennsylvania, a nonprofit that supports a single-payer program, is the funding procedure for everything from minor stitches to long-term chronic care for cancer. The yearly estimated cost of the system, he says, is about $45 billion. About $48 billion should go into the fund each year.

When Anderson finally lands a new job — he's looking — he estimates his yearly income to be around $18,000. Under Manderino's bill, he'd pay 3 percent of that for full coverage, or about $540 a year. On average, under Rendell's plan, someone in Anderson's situation would pay about $40 a month ($480 a year), plus co-pays for doctor visits.

While variants of the single-payer plan have taken hold internationally, there hasn't been much success here. Legislators in Oregon, Massachusetts and California pushed this type of reform, but couldn't make it law.

Most criticisms of single-payer coverage deal with its logistics. Switching to this system, says James Browning, director of PennPIRG, a public advocacy group, would both dissolve health care as we know it, and demand the creation of another — hopefully leaner — bureaucracy.

That still doesn't involve growing the multibillion-dollar fund. In all, Rendell's office figures that a single-payer plan would take from 10 to 15 years to fund and implement. "It's much more costly" than Rendell's bill, says Amy Kelchner, spokeswoman for the Governor's Office of Healthcare Reform.

Manderino admits that, in the short term, the governor's bill is more feasible because it would be phased in gradually: "But in the long-term, ideally, my bill would work better."

Another roadblock, of course, is the politics.The private-insurance lobby is a major donor to many campaigns, and has plenty of sway in Harrisburg. This multibillion-dollar industry won't let a mere state representative flush it out of business. As Browning put it, "Think of Arnold Schwarzenegger in his powerlifting days. That's the strength of the health-care lobby in Pennsylvania."

Another problem is the new taxes. Convincing the larger population — and its state legislators — that everyone needs to contribute to a universal health-care fund is a hard sell, says Pittsburgh-based state Rep. Anthony DeLuca, chair of the insurance committee where the single-payer bill sits. Why should someone who has insurance, and likes their coverage, want it to vanish?

When asked if there's any chance of the bill getting out of committee for a full vote, DeLuca says, "It's not too good." For the bill to become law, Manderino would have to persuade Senate Republicans — the majority party — to rally against a strong private industry, and then sway many House Democrats from the hallmark of Rendell's second-term agenda.

"The Rendell sycophants who think the governor walks on water think that because Rendell said his plan will work, it must be true," Pennacchio says. "The political dynamics are in his favor."

But Rendell doesn't necessarily think single-payer is a bad idea — for the nation. Kelchner says the governor thinks a single-payer system has a better chance of surviving if the entire country contributed to a massive fund. Pennacchio, though, thinks success locally could have national implications.

Since 2005, U.S. Rep. John Conyers (D-Michigan) has had a single-payer health-care bill in the legislature, but other ideas are gaining momentum in the 2008 presidential campaign spotlight. On Monday, Hillary Clinton laid out a plan that would make it difficult for private insurers to deny coverage or charge high payments — think of Anderson's $600 quote — for health care. The only way the legislators and the feds would take up a single-payer program, Pennacchio says, is if states show it can work. And if it doesn't? "We'd just have to go back to what we had before," he says. That is exactly what people like John Anderson doesn't want to hear. Pennsylvania shouldn't be some experimental laboratory for the entire nation, he says, providing everyone with insurance only to have it fail years later.

"I'll support any kind of reform," he says, "As long as the price is right."

(tom.namako@citypaper.net)