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Walrath & Johnson: U.S. Health Care 2007

Health Care 2007

By Richard E Walrath and Patricia L Johnson

There is a very good chance with all the media hype Congress will give in to the Bush plan for a “surge” in the number of troops needed for the war he started in Iraq and nothing will get done. The rest of the world is not going to help the United States in Iraq until he leaves.

He should resign.

What the United States needs is not a “surge” but surgeons, doctors, nurses, hospitals – health care for all including the 46 million (2005 Census Bureau Report released August 2006) who now have no health insurance.

This number grows every day because unless health care is offered by the employer, the individual cannot afford to buy it.

In many cases, even if it is offered, the premiums for the employee are so high they are unaffordable.

The one possible bright spot in the health care crisis is the VA. It’s ironic but the cost of the war in Iraq is shortchanging services to our veterans, including those who served in Iraq.

Nevertheless, the two programs – VA Health Care and Medicare go a long way to providing health care to at least 1/3 of the adult population.

Take a look at the VA budget for health care and Medicare. In 2005 7.7 million were enrolled in the VA health care system. 5.3 million received medical treatment at VA facilities at a cost of $31.5 billion dollars, while 43 million were enrolled in Medicare.

Drugs under the current Bush Part D program cost far more than the VA pays for them.


Because that’s the law, as passed by Republicans, after a lot of arm-twisting when they were in the majority.

If Medicare is allowed to negotiate the price for drugs – like the VA – billions of dollars can be saved long term, dollars that are now going to subsidize insurance companies and drug manufacturers. “A November 2005 report put the annual cost of the drug Lipitor through the Medicare prescription drug plan at $717.84, while a year's supply of the same drug through VA costs $497.16” Rep. Nita Lowey (D., N.Y.)

Our failure to negotiate is what is costing this country billions of dollars on the war in Iraq. Is our failure to negotiate Medicare pharmaceuticals going to force us to lose the healthcare battle also?

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) made prescription drug coverage under Medicare Part D available to all beneficiaries through various plans.

When the plan went into effect, six million of the 43 million Medicare beneficiaries were eligible for both Medicare and Medicaid coverage. Prior to January 1, 2006 these ‘dual eligibles’ received outpatient prescription drug benefits through Medicaid and on January 1, 2006, the coverage was transferred from Medicaid to Medicare.

The annual health care spending report, prepared by Aaron Catlin, Cathy Cowan, Stephen Heffler, and Benjamin Washington - the National Health Expenditure Accounts Team, published in Health Affairs indicates U.S. health care spending increased 6.9 percent in 2005 to almost $2.0 trillion dollars, or $6,697 per person.

Is it any wonder that Governor Schwarzenegger proposed a comprehensive health care plan for the citizens of California?

California with 6.5 million uninsured has the largest number of uninsured in any state. By Federal law, emergency rooms must treat individuals that require service. This has resulted in more than 60 emergency rooms closing in California in the past 10 years due to expenses incurred from treating uninsured patients.

When the individual receiving treatment does not pay the costs associated with ER treatments, the costs are passed on to others in the form of higher deductibles, treatment costs, insurance premiums and co-payments.

The Governor’s plan is intended to benefit Californians by requiring all citizens of the state to have coverage that will protect families against catastrophic medical costs. Very low income Californians will be eligible for Medi-Cal, and lower-income working residents will be given financial assistance to help pay the cost of coverage.

Insurers will be required to guarantee coverage to affordable products.

Incentives will be put in place to reward both public and private sectors for healthy behaviors.

Medi-Cal payments to providers, hospitals and health plans, will be increased significantly to encourage greater participation.

Efficiency will be improved by requiring health plans (HMO’s), hospitals and insurers to spend 85% of every premium dollar on patient care.

State tax laws will be aligned with Federal laws providing tax breaks for both individuals and employers.

Increased Medi-Cal rates and eliminating the uninsured will benefit both doctors and hospitals; therefore they will be charged a coverage dividend. 2% for doctors and 4% on hospitals. Employers of 10 or more who do not provide coverage to employees will pay a 4% payroll ‘in-lieu’ of fee.

Only time will tell whether or not Governor Schwarzenegger’s plan will work, but at least he’s taken the first step, which is realizing there is a serious health care crisis in his state.

What will it take for our government to realize there is a serious health care crisis in the country?


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