An Open Letter to Senator Mark Warner

Denbo — Sat, 08 Aug 2009 13:52:45 GMT

An August 6 article by Chad Terhune and Keith Epstein in Business Week reveals that the senator has no clothes. What the article exposes is that, even though the senator was elected to represent the citizens of Virginia--elected with a president who seeks affordable, reliable, and effective health-care for all Americans--the senator chooses to represent the interests of the health-care industry, especially the UnitedHealth Group.

The practice of relying on and repeating the "research" and "analysis" by UnitedHealth and the Lewis Group, which is owned by UnitedHealth, shows careless narrowness--careless of the citizens of Virginia--and troubling neglect regarding independent and non-partisan research on health-care reform.
The narrowness and neglect approach dereliction of due diligence. Why? Because the nonpartisan CBO shows that the "research" by the Lewin Group's actuary John Shells, who claims that a public option for health insurance would de-stabilize the market because 88 million Americans would choose the public option, is exaggerated.

It is so ironic that a businessman like yourself, who has touted all his professional life the importance of competition, the competitiveness of the free market and the value of CHOICES for consumers, seeks to undermine consumer options.

Fears and scare tactics expressed by interested parties that a strong public option will out-compete the private sector are not only ironic (because the private sector is supposed to be where competition is most efficient) but also alarmist. The elimination of medical underwriting will significantly lower the administrative costs for private insurers. In addition, as health-economist Uwe Reinhardt points out, "if the new public plan has to negotiate its own prices, then it would not have a competitive advantage any more 'unfair' than is the ability of large insurers-such as Aetna and Wellpoint-to negotiate lower prices with hospitals and physicians."

In other words, there are ways to allow consumers the full range of health-insurance choices--including a public option--without undermining any of them. The private sector is NOT going to falter, but instead will flourish, when 47 million uninsured citizens enter the market. The private sector's fears and manipulations seem to be based more on greed than fact and fair-play.

Please represent the interests of the citizens of Virginia and give them the full range of health-insurance options, including a competitive public option, and trust them to choose what is best for themselves.

PAYING FOR HEALTH-CARE FOR ALL U.S. CITIZENS

Denbo — Sun, 12 Jul 2009 21:26:42 GMT

Cost Estimates by the Congressional Budget Office (CBO)

The CBO's initial costing of an early draft of the health-care bill--$1 trillion over 10 years-was incorrect because the CBO did not assess the effects of the public option or of the mandate on most employers either to provide insurance or contribute to the public plan.

After factoring in the public option and the mandate on employers, the 10-year cost of reform drops by nearly $400 billion while achieving near universal coverage. See here.

According to Jonathan Cohen in The New Republic (7/15/09), the CBO's latest costing of the health-care reform bill, assuming that it includes a strong public option such as in the House version, shows that the reform bill will end up actually saving $150 billion in the next 10 years. See here.
Paying for Health-care Reform

If we assume, however, that the reform bill will save $400 billion and cost $600 billion, how should the $600 billion be paid for?

The following proposals, which are being circulated in Congress, are economically, politically, and morally just in relation to heretofore unfair and short-sighted tax policies:

(1) An increasing income-tax surcharge on those making $250000, $500000, and $1million or higher per year. Since the Reagan era, America's wealthiest have enjoyed a long-run of huge gains, becoming (as the data repeatedly show) richer and richer whereas working Americans have seen their earnings stagnate. (Because run-away health-care costs have been eating away at their earnings, reform that actually controls costs and reduces insurance premiums will constitute a pay-hike for working Americans. After decades of marginal income growth in relation to inflation, we deserve this; the wealthy will remain so, regardless.)

(2) Letting the Bush tax cuts expire. (This is also a matter of tax-fairness.)

(3) Capping specific deductions, including those for charitable contributions, at the 28 percent income tax bracket. (Again, this is a matter of tax-fairness; and Warren Buffet agrees: See here.

(4) Ending the tax break on health-care flexible spending accounts. (Additional tax fairness. As a middle-income wage earner, I am quite willing to forego this tax break, and so should the wealthy be willing to forego some of their tax breaks. We must all make sacrifices for the greater good of universal health-care, which will benefit not only all individuals but also America's businesses.)

(5) A sales tax on beverages sweetened with corn syrup or other sugars because these contribute to excessive weight-gain and diabetes-the two most serious threats to Americans' health and the cost to maintain it.

Fairness of a Strong Public Option

Fears expressed by interested parties that a strong public option will out-compete the private sector are not only ironic (because the private sector is supposed to be where competition is most efficient) but also alarmist. The elimination of medical underwriting will significantly lower the administrative costs for private insurers, however. In addition, as health-economist Uwe Reinhardt points out, "if the new public plan has to negotiate its own prices, then it would not have a competitive advantage any more 'unfair' than is the ability of large insurers-such as Aetna and Wellpoint-to negotiate lower prices with hospitals and physicians." See here.

Recent CBO cost-estimates on the House version of the health-care reform bill show that reform which includes a strong public option can be paid for through a combination of ways, without raising taxes on middle-income Americans, and may actually save $150 billions in the next 10 years. A public plan that has to negotiate prices just as private insurers do will not have an unfair advantage.

If health-care reform passes, however, without a strong public option competitive with the private sector and without serious and enforceable cost-containment provisions, the elections in 2010 will be a disaster for the Democratic Party.

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An Open Letter to Senator Mark Warner

PAYING FOR HEALTH-CARE FOR ALL U.S. CITIZENS