"Health-care isn’t the first boon that President Obama tried to give
us through a public-private partnership. When he took office, more than
25 percent of US home mortgages were underwater—meaning that people owed
more on their houses than they could get if they tried to sell them.
The president offered those homeowners debt relief through banks. Now
he’s offering healthcare through insurance companies.
In both cases, the administration shied away from direct government
aid. Instead, it subsidized private companies to serve the people. To
get your government-subsidized mortgage modification, you applied at
your bank; to get your government-mandated health coverage, you buy
private insurance.
Let a Hundred Middlemen Bloom
In other countries with national health plans, a variety of independent healthcare providers—hospitals, doctors and clinics, among
others—deliver medical care, while the government doles out the
compensation. They let a hundred healthcare providers bloom, but there’s
only a single payer. If the US moved to single-payer healthcare, however, what would happen to the private health insurance business?
In the 1990s, the conservative Heritage Foundation floated the idea
of extending health coverage to more Americans via government exchanges
or “connectors”
that would funnel individual buyers to competing, for-profit health
insurance companies. In other words, let a hundred middlemen bloom.
On the face of it, such a plan would seem expensive, since it means
supporting two bureaucracies, one of which would be obliged to take
profits for investors. Meanwhile, doctors would still have the expense
of trying to collect from multiple insurers with reasons to stall. But
the Heritage plan
had one great advantage. Since Harry Truman, American presidents have
tried unsuccessfully to get us national healthcare. The exchange system,
however awkward it might be, pacified the insurance companies, which
had previously spent millions of dollars to defeat other plans for
“socialized medicine.” With the support of those companies for a program
that not only kept them in the picture but also promised to deliver
millions of new, subsidized customers, Obama gave us a national
healthcare law.
The danger is that it essentially makes insurance companies our
medical receptionists, a profit-making face that greets sick people
whenever they try to use their government healthcare. That gives private
companies a lot of power to make the government look bad.
That’s why it’s important to understand how banks used Obama’s
mortgage subsidy program to sabotage debt relief and discredit
government. If we grasp how they pulled that off, we may be able to
protect the present health plan and someday even get genuine
single-payer healthcare out of it. So here’s the story.
The Home Affordable Modification Program (HAMP) offered banks
government incentives—cash bonuses—to lower the principal or interest on
underwater mortgages. Of course, health insurance companies don’t
actually provide healthcare, but banks did provide the underwater
mortgages, so, however ill-advised or fraudulent they were, those
institutions obviously had a role in negotiating their modification. The
HAMP partnership was structured so that the government’s role was to
provide cash incentives to banks, while participating banks would be
required to accept and process the applications of those who were eager
to modify their onerous mortgages. Whether they granted a modification
was, however, strictly up to them."
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